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Lawmakers question sense (and cents) of insurance program

Taxpayers have paid more than $4-million to a private company so teachers can get free liability coverage.

By STEVE BOUSQUET
Published March 31, 2005

TALLAHASSEE - Florida taxpayers have paid more than $4-million to a private company over the past four years so teachers can get free liability insurance coverage without joining a union.

More than 200,000 teachers are in the program, but teachers are seldom sued. After four years the insurance company hired by the state has paid $65,000 in claims, all in the past year.

Despite the small payouts, Gov. Jeb Bush wants the Legislature to increase spending on the program by $200,000 next year, citing higher premiums and increases in teacher hiring because of the class size amendment.

Some of Bush's fellow Republicans now question whether the program, which was begun as a way to punish a pro-Democrat teacher union, amounts to a windfall for a private insurance company.

"A million dollars is still a lot of money in Palatka," said Rep. Joe Pickens, R-Palatka, who oversees education spending in the House. "I just question what benefit we're getting."

Pickens asked why the state has spent so much on the program when teachers are already protected under state law from lawsuits for acts committed on the job.

"Teachers getting sued for having done something within the normal scope of their duties is pretty rare," said Pickens, who is legal counsel to the Putnam County School Board. "I thought we were creating a potential deep pocket for a teacher that didn't exist otherwise."

With Pickens' approval, the House wants to slash Bush's request by half, from $1.4-million to $700,000. The amount is a tiny fraction of a proposed $62-billion budget, but most of the budget is for fixed costs, such as salaries. Lawmakers have direct control over a small portion of the total.

The Senate's budget proposal includes $1.4-million as Bush requested.

"We just picked up his request," said Sen. JD Alexander, R-Lake Wales.

The difference will have to be resolved by budget committees in the next few weeks.

In a memo to lawmakers, Bush said the increase is due to higher premium costs, the hiring of more teachers, and the inclusion of charter school teachers, student teachers and interns under the program.

"We've had a workload increase," said Bush spokesman Jacob DiPietre. "The growth in the number of teachers is primarily because of the class size amendment, so the governor is requesting more money to cover this influx."

The program, known as educators professional liability insurance, was born of politics and longstanding differences between the Republican-controlled Legislature and a labor union that has long been a bulwark of the Democratic Party.

Four years ago, lawmakers set aside $1.2-million to create the program, after concluding that some teachers join a union mainly for insurance. The original legislation was sponsored by Rep. Frank Farkas, R-St. Petersburg.

The plan was to steer the business to the Professional Educators Network, a group with ties to Republicans. When the Senate balked at that no-bid deal, the state solicited proposals from competing firms.

Two firms applied and the state chose the low bidder, Arthur J. Gallagher & Company. The Miami insurance broker represents National Union Fire Insurance Group, part of American International Group, the world's leading insurance company.

As the program quietly entered its fifth year, Ron Meyer, an attorney for the Florida Education Association, the union representing teachers, wondered where all the money was going. He asked the state for an internal loss report.

For the first three years, records show, the state paid more than $3-million and paid no claims. In the fourth year the state paid another $1-million and paid its first five claims, totaling $65,000.

"There's something wrong here," Meyer said. "This is just creating a pot of money for people to sue for. My thinking is, where do I sign up to apply for this insurance?"

The new scrutiny surrounding the insurance program is somewhat surprising to Rep. Charlie Justice. The St. Petersburg Democrat has tried without success for four years to kill the program and divert the money to other educational programs, such as autism or special education.

"We could spend that million dollars in other places, and get more bang for our buck," Justice said.

Justice now has some allies in the opposing party.

"All I care about at this point is, are we getting our money's worth?" asked Rep. Nancy Detert, R-Venice. "Is this the only company that can provide that insurance? I don't think so."

[Last modified March 31, 2005, 19:59:01]