Recent large claims and high reinsurance rates have resulted in an average 17% increase in renewal rates, PACE Administrator Dave Harvey told members in a recent letter. This is a significant departure from the past six years, when PACE has been able to keep annual rate increases to an average of 2.5%.
PACE was formed by intergovernmental agreement to jointly self-insure to protect members from liability and property claims. PACE is not an insurance company; it is a trust governed by a board of PACE members. Oregon law, under ORS 30.282, specifies that self-insured local government programs such as PACE must annually set their rates based on proper actuarial calculations and must purchase reinsurance to protect against catastrophic loss. PACE worked hard to lower this increase as much as possible; the rate increase would have been closer to 25%, but thanks to the interest earnings from our claim reserves, PACE was able to lower it to 17%.
These are difficult times for all Oregonians dealing with the COVID-19 pandemic’s impact on school districts, ESDs, community colleges, organizations, and communities. PACE Trust board members understand the pressures on PACE members because they include business managers, superintendents and board members of school districts, community colleges and education service districts.
“We recognize that this is an incredibly tough time for all of us to face a significant rate increase. But PACE’s rate structure is based on claims experience and risk,” said Sharla Andresen, PACE Trust chair. “The unfortunate reality is we had a number of big claims over the last year, and as an insurance pool when our neighbor incurs a big bill, each of us bears part of the burden for sharing that cost. It’s important to take a long term view: over the past six years PACE has managed to keep rate increases averaging 2.5%. If we can all work together to reduce our risks in the coming year then we can look forward to sharing those savings.”
If you have questions, contact PACE: firstname.lastname@example.org or 503-588-2800.