Not for Profit, All for Stability

Being a not-for-profit is one of the strengths of Chambers of Commerce Group Insurance Plan. It’s a mandate to manage premiums with extra care, and a path toward sustainability of the Plan. Because Chambers Plan is a not-for-profit, all surpluses are rolled back into the Plan. You might be wondering what this means.

When firms buy insurance, they are putting money into a premium pool with many other firms to help participants should they suffer a loss or expense covered by the policy. Most polices are annual contracts, with premiums based on informed predictions about how much money will be needed to pay future claims. At the end of the policy term, it is hoped that enough premiums were collected from all participants to cover the claims incurred.

Insurance companies will use this claim experience each year to help predict how much money they will need to pay the upcoming year’s claims and set premiums accordingly. Any surpluses or deficits belong to the insurance company, as they are assuming the risk, so if there are deficits, the insurer absorbs the loss and will use this information to set rates for the upcoming year. This can sometimes result in a significant increase in rates for a firm. If there are surpluses, these funds are typically kept by the insurance company.

This is where the Chambers Plan is different. Your premium dollars are working for you, not the insurance company.

Surpluses in Chambers Plan do not go to the insurance company but are used in determining the premiums for the upcoming year, which means more reasonable renewals for everyone. Chambers Plan has had an average annual renewal action of 4.2% over the last five years and only 3.8% over the last decade, and that’s a direct result of its not-for-profit strategy keeping your premiums in check.

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