Staffordshire wanted to develop their offering to schools, integrating their funds to provide one solution with wider cover choices and a range of benefit options. The council aims were:
- To offer increased certainty to scheme participants
- To give schools sufficient choice to enable them to make informed budget protection decisions
- To reduce the administrative burden of running various separate schemes
Staffordshire wanted to consult with an independent insurance professional to ensure an appropriate rating and pricing structure would be arrived at for the new schemes. BEST already provided a stop loss insurance layer to protect the teacher sickness mutual fund, therefore Staffordshire nominated us to work with them on a thorough analysis of the current schemes and the proposals for change.
By selecting our services Staffordshire ensured that their insurers would continue to provide stop loss cover for the scheme, even though there had been some major changes to the composition of the risks.
Analysis
We independently analysed data from Staffordshire’s funds and compared it with the statistics that we have compiled from our wide exposure to absence data in the education sector.
We suggested offerings for each of the staff categories that matched Staffordshire’s aspirations and the prevailing offerings available in the commercial insurance market.
Proposal
We presented our proposals to Staffordshire County Council, recommending a single fund structure.
The scheme design offered a wider range of daily benefits to cover teachers. Non – teaching staff were offered a range of daily benefit levels and excesses. We recommended retention of the headteacher absence top-up facility on a 20 day excess but suggested offering a range of three different fixed benefit levels.
Once Staffordshire had decided how they wished to proceed we were able to support the new scheme by offering:
- A set of scheme rules which could be compared with other commercial scheme offerings.
- Rating tables which would enable scheme administrators to calculate premiums efficiently for different cover options. Support for the changes from stop loss insurers, ensuring the new single fund was protected at a time of increased uncertainty.
Staffordshire County Council had, for a number of years, been running various mutual funds to provide their schools with cover against the costs of staff absence. The funds for some categories of staff were paying a fixed daily benefit for each day of absence. Schools were requesting more flexibility in the choice of benefits and excess.
Other funds were acting on a strict ‘pool’ basis, paying out a variable amount for each day of absence, depending on how much absence was experienced each year. This would leave schools with less reimbursement per day in the years when absence levels were highest.
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