June 2020 • Volume 108 • Number 6 • Page 8
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Our Success Is Mutual
Celebrating 32 years of service from the ISBA Mutual Insurance Company.
Many of our “seasoned” lawyers will be amazed to learn that the ISBA Mutual Insurance Company is about to celebrate 32 years of service to Illinois attorneys. It was 32 years ago, in response to drastically increasing premiums for all Illinois lawyers and after fruitless meetings with the principal insurer of ISBA lawyers, that ISBA leaders embarked on the momentous task of organizing a bar-affiliated-risk-retention group.
Initially, the ISBA asked members for $50 each in seed money for organizational expenses. The bar responded with $100,000 in contributions, a measure of enthusiasm that gave ISBA leaders the optimism to move forward. ISBA Mutual was incorporated on June 15, 1988, and given a permit to solicit surplus funds. Once again, the bar responded. In 1988, the law required $2 million in surplus funds to commence business and to write up to $5 million in coverage. With the conviction that lawyers would respond, leadership committed to raising $3.5 million by Aug. 15, 1988.
On a personal note, Jon DeMoss, the then-ISBA executive director, designated my wife, Janet, who was then the ISBA’s assistant director of membership services, to organize and memorialize the daunting task of accounting for the capital contributions with the company’s insurance advisors, Alexander & Alexander. Janet relates that the funds started slowly in late June and July. For weeks, it was questionable whether Illinois lawyers would or could respond with the requested $1,250 per-lawyer contributions—with no assurance to them of success. As the deadline of Aug. 15, 1988, approached, our lawyers began to respond. On the deadline day alone, $1 million in contributions poured into the surplus fund. The $3.5 million goal was met.
Other challenges soon presented themselves. No startup insurance company can survive without reinsurance. U.S. reinsurers were not lining up in 1988 to back the $5 million policy limit needed to serve our legal community. Whether our competitors had some role in the reticence of the market to accept our tiny risk-retention effort or good business practices dictated lack of interest is subject to conjecture. But with the assistance of the ISBA Mutual’s financial advisors, the fledgling organization put together an initial group of reinsurers through Lloyds of London. To this day, ISBA Mutual annually places its reinsurance in London and many of the same groups who initially had faith in our efforts.
Today, the ISBA Mutual is among the highest-rated, bar-affiliated insurers of lawyers for professional liability in the nation and has the largest number of Illinois lawyers with professional liability insurance. We also are proud that ISBA members can rely on the finest policy available. On top of it all, the ISBA Mutual has paid dividends to its insureds for 15 uninterrupted years without having to pay commissions to brokers. This savings is passed on to you, the insureds.
There are too many leaders involved in those efforts from 1988 to single out any individual. But please visit ISBA Mutual’s website to read about the company’s history and watch the seven-minute video about the ISBA Mutual and the accomplishments of its founding heroes. ISBA Mutual President Jeff Strand and Chairman of the Board Umberto Davi also invite each of you to visit ISBA Mutual’s office at 20 S. Clark Street, Chicago, where you can view that initial sheet of reinsurers.
Read President Sosin’s farewell reflections as his presidential year comes to a close.