Director: District insurance switch will hurt taxpayers [Standard-Speaker, Hazleton, Pa.]

May 08--Hazleton Area school board's vote to switch insurance brokers jeopardizes a deal with the district's current provider and could cost taxpayers more money, some directors allege.

Last month, the board appointed the Eastern Insurance Group, with a local office at 22 W. Broad St., Hazleton, as the district's broker of record for 10 different insurance policies, including property, inland marine, crime, general liability, school leader legal liability, automobile, umbrella ($10 million), terrorism risk insurance act, stop-loss insurance, and student accident/athletics.

At a special meeting Monday, board President Brian Earley asked the board to reconsider that action and add the local Dryfoos Insurance Agency as a district insurance broker to represent one specific insurance company.

According to Earley, there are only three companies in the state that insure school districts: PSBA (the state school board association), Liberty Mutual, and WRM America/Wright Specialty Insurance.

Wright Specialty is the district's current carrier.

But the Eastern Insurance Group is licensed to represent PSBA and Liberty Mutual, not Wright Specialty.

The Dryfoos agency is a licensed agent of the Wright Specialty company.

At Monday's meeting, Earley asked the board to rescind it's vote of last month naming Eastern as the district's sole broker of record and entertain a new motion to add Dryfoos as a broker specifically for Wright Specialty.

Earley's suggestion died on a 4-4 vote, with Earley and directors Robert Childs, Carmella Yenkevich and Marfy Yanac in favor of adding Dryfoos to the mix.

Opposed to changing last month's action were directors Tony Bonomo, Clarence John, Robert Mehalick and Robert Wallace.

Director Steve Hahn was absent from the meeting. Without the ninth director's vote, the tied vote dies as a failed motion.

Earley said the board's action to keep just one broker who is not an agent for the district's current insurance carrier could result in higher insurance premiums.

"This board has made a conscious decision to not even consider a renewal quote from the district's current carrier, and to take a chance that we will be able to get a reasonable proposal from PSBA or Liberty," Earley said. "Why this board would abandon its current coverage without having a viable alternative in hand is beyond me."

The Dryfoos agency was the district's sole broker of record last year. The Eastern agency was district broker in years prior.

This year, a split board batted the broker appointment between Dryfoos and Eastern since January until late last month when Eastern was appointed 5-4 with directors Tony Bonomo, Steve Hahn, Clarence John, Robert Mehalick and Robert Wallace in favor of Eastern.

Mehalick said both Dryfoos and Eastern made presentations to the board and both are reputable agencies.

Wallace said he voted to stay the course with last month's action in order to give Eastern the opportunity to deliver price quotes.

"We haven't even given Eastern the opportunity to come up with prices for us to see where we are," Wallace said.

Childs said he favored adding Dryfoos to the mix in the interest of competitive pricing.

"Who the broker of record is, I don't really care. Whoever comes back with the best price and the lowest commission is what I'm interested in," Childs said.

Earley said he does not agree with limiting the number of companies that can submit insurance bids to the district.

"I just don't agree. When you minimize the number of companies that can submit bids, the price will go up. Hang onto your wallets, taxpayers," Earley said.

Explaining the reason for his exclusive support of the Eastern company, Bonomo said it was an effort to "spread the wealth" in a small town.

"When you live in a small area like this, you have to spread the wealth. Why should one group have a monopoly on things?" He said.

Earley threw Bonomo's words back at him when the board vote supported Eastern's sole brokerage.

"This is not about sharing the wealth. If anyone wants to share the wealth, they should do it with their own money," Earley said.

Bonomo said the matter should be closed since a majority of board members chose Eastern as sole broker in last month's vote and again in Monday's special meeting vote.

"We just appointed a company for the second time. Let's give the company their due," Bonomo said, and called for an immediate adjourn of the meeting.

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