The risk
Most schools, particularly primaries, were choosing to participate in the mutually pooled fund however the fund’s performance was volatile. The fund would occasionally experience end-of-year deficits. Schools disliked the consequential end-of-year ‘clawback’. Schools wanted to have greater certainty about budgets.
The solution
The Education Department asked their Risk & Insurance Department for advice. BEST met with the Risk & Insurance Department and Council strategists to review the situation and explore options. Data was provided to BEST. BEST analysed the data and negotiated with commercial insurers.
The scheme 2003 – present
Today the scheme continues to be run as a mutually pooled fund. Unduly high levels of sickness are protected by the stop loss facility. Schools do not experience additional calls on their budget at the end of the year. Most schools continue to participate in the mutual fund and some previous leavers have now returned. In the insurance year 2006/2007 Vale of Glamorgan notified a substantial claim on their stop loss policy.
“We wanted to find ways of providing stability to schools and so offer a more reliable fund. Lack of certainty on costs and the possibility of an end-of-year ‘clawback’ was one of the main reasons schools were opting out. The introduction of a stop loss facility provided much greater certainty. Each year, more schools are returning to the fund.”
Martin Donovan, Head of Strategic Planning,
Vale of Glamorgan
Read more about our stop loss budget protection
Read another stop loss budget protection case study
Back to case studies