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RCABC Protects Members With Insurance Package
AAn insurance chill has swept through the $13 billion British Columbia construction industry, forcing some architects, contractors and engineers to the sidelines during the biggest building boom in the provinceís history. But, taking the initiative that has defined the organization since its founding in 1958, the Roofing Contractors
Association of British Columbia is now offering self insurance to its members, the first such organization in Canada able do so. RCABC incorporated its own captive insurance company with the help of insurance manager Lowndes
Lambert Group (Canada), and three underwriters.
The Langley-based RCABC, whose members handle most of the large government and commercial roofing contracts in the province, began the process of creating a
Special Purpose Insurance Corporation by surveying itís members, hiring an independent actuary, developing a business plan and presenting it to the re-insurance market.
By Frank O’Brien
Known as the Roofing Contractors Association Indemnity Corporation (RCAIC), the insurance corporation is wholly owned by members of the RCABC and licensed and regulated by the Financial Institutions Commission, the provincial regulatory body that oversees licensing of insurance companies in British Columbia. The RCAIC policy offers members $5 million in liability insurance. RCAIC began writing policies in December 2004. At the end of February 2005, 1/3 of the RCABC Members have switched to the new insurance corporation.
RCAIndemnity marks the first time that a trade association has been able to meet FICOMís rigorous regulatory criteria, according to Brian Hofler, RCABC executive vicepresident. Hofler added that a long-standing Association warranty on its memberís work, its highly rated training programs and tough standards for membership, convinced the underwriters that a captive insurance program would
work for members of RCABC.
According to Hofler, RCABC members, even those without claims against them, have seen their insurance coverage skyrocket in recent years, some by as much as 500 per cent. As a result, smaller roofers could pay annual premiums ranging from $50,000 to as much as $350,000 for general liability coverage, he explained.
Canadian insurance companies reported record profits of $4.2 billion in 2004 - a figure the Consumers Association of Canada called ìobscene.î The industryís 206 companies also reported record return on equity of 20.6 per cent last year. Since the RCABC began providing members coverage at lower cost, ìsome insurance companies have begun offering lower renewal rates.î But, Hofler wondered, ìWhy were these offers not on the table prior to the formation of RCAIC?
He noted that his groupís members benefit from needed stability. And as more firms join up, rates will likely come down, he added.
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