Seymour Asks Backing for Statewide Child-Care Industry Insurance Pool

State Sen. John Seymour (R-Anaheim) told directors of nonprofit child-care and youth agencies Tuesday that insurance companies must be forced to give organizations such as theirs affordable premiums to eliminate the threat of closure that many of them are facing.

“I think they (insurance companies) are walking away from an industry that is . . . extremely critical,” Seymour told more than 30 directors of agencies who met withrepresentatives of United Way, which provides funding for the groups.

The meeting served to organize the nonprofit agency directors to combat the recent, sharp increase in the cost of insurance. An informal survey by United Way of Orange County has revealed that at least 45 nonprofit agencies that provide day care and youth services are experiencing insurance problems.

One agency, the Boys’ Club of Garden Grove, has had its liability insurance canceled and other agencies have had their premiums increased as much as 400% while coverage has been reduced.

Seymour urged the directors to rally support for his bill (SB 1474) that would establish an insurance pool to provide liability coverage for child-care providers who cannot obtain affordable insurance through normal channels. The emergency legislation, which will be heard by the Senate Insurance Committee on Aug. 21, would set up a joint underwriting association that would be funded by insurance carriers but administered by the state.

Insurance Lobby

The senator said his bill would be “very tough” to pass since the powerful insurance lobby is fighting the measure.

Seymour said passage would force insurance companies to provide adequate and affordable coverage for child-care centers. He also said insurance companies have not provided data proving that recent cases of child abuse and other irregularities at child-care centers have hurt their business.

“I have asked them to give me data. But they have yet to provide that to me,” he said.

Although Seymour’s bill, which was introduced July 18, shortly before the Legislature adjourned for its summer break, is limited only to child-care facilities, he urged directors of youth-oriented agencies to support it.

“The best thing is to help me win this one and I’ll help you win with the next one,” he told them, adding that the only “realistic” chance he had of passing the measure would be to limit it strictly to child-care agencies.

Before meeting with Seymour, the directors and other professionals meeting at the United Way’s Garden Grove office voiced concerns about recent cancellations of coverage or drastic increases in premiums.

Agencies Close Doors

Thus far, eight child-care agencies in Orange County have had to close because the owners couldn’t find an underwriter or insurance premiums were increased so much the business was no longer viable, they said.

“There are agencies going without insurance because no one will (underwrite) them,” said Marilyn Gilmore, director of Camp Fire of Tustin, which recently had its insurance premiums increased 257% and coverage reduced by $500,000.

Chancy S. Wooldridge of The Infant Center in Santa Ana said that it took her “10 or 15 calls” before she found a company to carry the liability on the child-care center.

“Some companies are changing their minds day to day on whether to write a policy,” she said.

The directors agreed to study the formation of a loan pool to help some agencies pay their premiums. The group also decided to conduct a survey to study how to find affordable insurance policies and to find out how some agencies have been able to renew their policies without drastic premium increases.

Gregg Goggin, United Way government relations director, said finding solutions to the insurance problems of the nonprofit organizations was critical to the survival of most of them.