Evacuation-Repatriation
Salary Insurance
Patrick Meyer
3 December 2001
________________________________________________________________
Since I had completed the survey on evacuation/repatriation and salary continuation vis a vis 911, I have discovered that Clements International once again offers coverage underwritten by Lloyds of London at pre-911 prices. This will likely have great implications for those of you who were in the process of trying to renew or obtaining initial coverage when disaster struck. Those of you interested can contact Dan Tuman at dtuman@clements.com. You owe it to yourself to check it out if you have a need for this type of coverage. Perhaps other providers are beginning to loosen up, so if you prefer to work with another agency, it is definitely worth checking.
Patrick Meyer
Date: Mon, 3 Dec 2001 08:16:17 -0000
Sender: Headmasters List at International Schools < HEAD-NET@TC.UMN.EDU >
From: PJ Meyer < pjmeyer@CENATRIN.BF >
Organization:
Subject: Evacuation, Repatriation, and Salary Continuation Survey Results
Dear Colleagues:
Here are some things to consider for your own situation.
The events of 9/11 in the
Eventualities of evacuation, repatriation, and salary continuation. Just how prepared is your school to meet these challenges?
For some of us, we think it can never happen to us. The silhouette of the
I have experienced only one evacuation, during the Gulf War, to a safe haven where after two and a half weeks we returned to re-open school. Insurance then for such events was a novel idea. Few schools had it. Our school didn't. Those that did made out like a bandit.
My school paid out about $75,000 from its contingency funds for flights and per diem for
about 30 overseas hires and their dependents. Had it not been deemed safe to return, it would have cost even more for onward flights to homes of record, and a great deal more to recruit staff had there not been a means to retain our staff with salary continuation.
We were fortunate. We were able to keep a staff intact and the school viable to complete the school year. What would it cost and how would it be paid for now? A reliable reserve fund?
Do you have one? Do you have insurance? Can you afford to renew it at the rate of 700-
800% more following 9/11?
My current school cannot afford the costs of insurance coverage even if it could find an
underwriter to bind it. Can yours?
The aftermath of the tragic events in the
To get a more global view on the impact upon international schools, I sent out a brief survey on the AAIE Head Net. There were ten questions. What follows are the insights from about fifteen responses received, item by item.
Item 1: What is your present policy regarding
evacuation, repatriation, and salary
continuation? And, Item 2: Is this coverage available to both overseas
and local hires?
Responses ranged from having no coverage at all, or "it can't happen here," to having clear provisions both in policy and in place because it can and has happened. Most schools provide evacuation of overseas hires only. A few specifically provide for an interim safe haven first, until the decision is made to close. Most schools provide 100% salary continuation for three months for both overseas and local hires based on when the decision to close is made. Some provide less for local hires. Only one school indicated that they maintain full salary for the entire year no matter what.
Item 3: Are you presently insured for these eventualities? And, Item 4: Where do you or will you stand when it comes to renewal for insurance?
Four schools said that they were insured. One did have it but decided to cancel it due to thehigh cost, whereas another decided to "bite the bullet" and pay the high renewal costs
because of problems in keeping a reserve fund intact for its intended purpose. Still another was awaiting a price quote and tended to think that if too high, a reserve fund would be the way to go. Finally, one felt complacent knowing they were insured this year, but unaware of the 700-800% increase looming ahead for renewals.
Item 5: Are you having difficulties obtaining insurance coverage, or do you anticipate having such difficulties at renewal time?
Those with coverage already could renew, but at the
extraordinary increases. Those without
coverage could not begin a policy even if they wanted to. It is unavailable. One Head
indicated that once in a former school her school had coverage, but then the
insurance company revoked the coverage when the risks became higher.
Item 6: If you do not have insurance, are you
self-insured? And, Item 7: How do you anticipate being able to pay for
the eventuality of implementation of an evacuation, repatriation or for salary
continuation?
One school decided not to self-insure because
in the past the reserve fund had been raided for other expenses. Several stated that policy allowed for keeping
tuition payments if school closes due to a force majeure
situation. So long as your original
budget is balanced and you have collected most or all of your revenues, you
should be in a fairly good financial position.
The only thing you would need to consider would be what would be needed
for extraordinary costs such as flights to a safe haven, and per diem. Many schools already had a reserve fund in
place or were in the process of starting and/or building up one. The level of reserve was typically 25%/3
months of the operational budget. The
best part of this peace of mind is the interest you can earn on it as it
continues to grow.
Teachers expect to
be taken care of and generally it has to become a matter of policy and contract
that they are covered. Teachers will and
should ask for clarification of benefits when they are being hired and even
after hired. It becomes more of an issue
in cases of financial instability and where priorities might compete and become
juggled around. If there is a balanced
budget, reserve funds, and/or insurance, policy must be in place providing for
the general welfare of the teachers and for the direction of the school. Only then teachers should be content and
reassured. Otherwise, there would
understandably be uneasiness. Even if
the school year is curtailed, you should keep teachers afloat in order to, in
turn, keep the school afloat for if and when it is to re-open. One of the primary reasons for evacuation and
repatriation, and salary continuation, is to keep the school viable so that you
can pick up where you left off. In
places where that protection is in place, it is a non-issue.
There is no issue
where insurance and/or reserve fund and policy are already in place. You need to have a plan by policy and the
means to achieve it. Finance Committees
should be alert to the issues of policy for tuition collection and retention,
balanced budgets, insurance or no insurance, or how to self insure with a
protected reserve funds earmarked specifically for protecting teachers and the
school in order to return their services.
Remember, the main focus is to maintain a viable school. As one school stated, "It is a fact of
life." Another stated
".The Board
will review all contracts beginning now in order to revise for the 2002-2003
school year."
Item 10: What comments in general do you have to offer
regarding the importance of this issue?
"It is
miserable-maybe we could apply for the funds that (President) Bush has frozen
belonging to the terrorist organizations."
"The Director's
contract has a six-month salary clause and states he/she will be responsible
for the school during that time period."
".professionally,
I have come to accept that making others feel safe has quickly become a
priority, so I think we have to continue to generate the funds for the
collective welfare and let folks know that they are going to be cared
for."
Set up a reserve to
handle the costs of shutting down. Save
it for a rainy day. It makes good fiscal
sense. Be sure to address the issue of
tuition refunds, it must be very clear and in policy."
"Work on
educating the need to ensure that a viable school will exist in that location
and what it takes to ensure such a school, then work on policies to build a
reserve."
"It's
important. I get the idea of building up
a reserve, with worse case scenario close-out as the maximum amount to be set
aside. Build up a general reserve fund
over a couple of years, and flag the requisite amount for
evacuating/closing/re-opening costs, and keep it growing from year to
year."
"I'm glad we
didn't go the insurance route when that seemed popular. You're likely wise to be up front with
prospective teachers during the recruitment process."
"Hugely
important. We will revise contracts to reflect current
reality."
"Not
very important in this part of our sleepy little corner of the world."
As a sidebar to this
article, I had likewise contacted our regional representative (Joe Carney) at
the Office of Overseas Schools, Department of State. He feels that this is a "Red Hot"
compelling issue that might require some kind of leveraging to get a response
from the insurance industry to meet the real needs of overseas schools. We won't be able to rely upon grant money for
this kind of issue. He proposes that he
and his colleagues meet to ascertain a global perspective on evacuation
insurance, although perhaps this survey to some great extent may have given us
a fair analysis of the situation. The
realization is there that only a few schools are actually in good shape to
actually handle such emergencies. Most
are struggling to maintain balanced budgets, let alone set up and maintain reserve
funds. And, most schools face the same
challenges in future recruitment or retention of faculty in event of a 3-month
evacuation.
To summarize, Jim
Ambrose offers sound advice that echoes much of what we now know - "Set a
financial reserve as a goal; work to achieve it over a four-year period; adjust
the evacuation policy upwards annually as the financial resources accumulate;
and, hope there are no disasters meanwhile."
I wish to thank all
the school heads who took the time to respond to this survey. With their collective wisdom, it is my hope
that we all take heed of the situation and become capable of making the
necessary policy and financial adjustments to protect our teachers and schools
from both disasters and their aftermath.
And, remember the
Cheers, Patrick Meyer
--------------------
Begin Original Message --------------------
Message text written
by James Di Sebastian
"I believe that
it was an unfortunate coming-together of 4 strange or at least very negative
people who then egged each other on and went way over the top."
--------------------
End Original Message --------------------
Dear Jim, cc Search
Your perception is
very accurate. MANY years ago, when
Elmore Rigamer was the resident shrink in the NESA
area, he presented a workshop during which he commented to the effect that
unbalanced people in a community somehow "find" each other and
(mainly because no one else is listening) form an alliance in which they feed off
each other and devolve into a downward spiral, sort of a closed reasoning
system that selectively filters external information and only lets in what is
consistent with their particular wiew of the
world. Basically, it's a form of mental
illness that allows the people to continue functioning.
He was thinking
mainly of parents moving into a community (although it applies equally to
teachers) and said that it takes roughly six months for other community members
to evaluate and judge the new ones and decide if they are "nuts" or
not. (My words, not
Elmore's!) In the meantime, they
can do untold damage. Such people are
often highly articulate and very passionate, with perceived offenses becoming
extremely personal. As with one case I
had early in my career (which I barely survived), some months after the flap is
all over, people ask "What was that all about, anyway?"
Elmore went on to
speak of communities in crisis (say, during times of high threat; the Gulf War
is an example) and that the "fearful" (again, my own words) should
not be allowed to congregate, that less fearful people should be infiltrated to
provide perspective and balance; otherwise, they feed off each others fears and
soon an issue is elevated to a crisis.
The good news is
that the truth becomes known over time . . . hope my recollection of Elmore's
words are accurate.
Keep the faith and
hang in there. Cheers, Jim Ambrose