Insurance

Canons 8.04 and 19.07

Resolved, that Canon VIII, Section 8.04(c) and Canon XIX, Section 19.07 of the Canons of the Diocese of California be amended as follows (insertions in bold italic text):

Sec. 8.04. Finance Committee.

[No change to subdivisions (a) and (b).]

(c) The duties of the Finance Committee shall be:

(i) To assist the Committee on Program and Budget in the performance of its duties, to provide financial and statistical information for its use in preparation of proposed budgets, to review such proposed budgets for financial integrity and to report its recommendations to Executive Council and to Convention;

(ii) To maintain general supervision of the financial affairs of the Diocese;

(iii) To direct that an annual audit be made of the financial records of all parishes, missions and other organizations carrying out Diocesan programs;

(iv) With the consent of the Executive Council, but subject to any general or specific guidelines that may be adopted by Convention, from time to time to set and alter the criteria for (A) the use of any Diocesan line of credit, (B) nonoperating expenses, and (C) expenditures from the endowment, gifts or other reserves, or from assets of the Diocese, including but not limited to the Corporation Sole;

(v) To require compliance by custodians of trust and endowment funds and of securities held by or for any parish, mission or organization of the Diocese with standard business practices prescribed by the Canons of The Episcopal Church and of the Diocese;

(vi) To act as adviser on financial matters to the Bishop, and, upon request, to individual parishes within the Diocese;

(vii) To require that appropriate liability, property, worker compensation, and other customary and appropriate insurance be maintained on all property owned by the Diocese, the Corporation Sole, and each parish, and by all Diocesan Institutions, including by adoption of minimum acceptable insurance limits and approval of insurance carriers;

(viii) To require adequate bonding or fidelity insurance of all persons handling funds of the Diocese and of any organization under its jurisdiction; and

(ix) To perform such other duties relating to the business affairs of the Diocese as may be referred to it by the Executive Council.

Sec. 19.07. Property Insurance.

All buildings belonging to or used by parishes, missions, and other Diocesan Institutions, and their contents, shall be kept adequately insured to the satisfaction of the Finance Committee and in accordance with any schedule of minimum acceptable insurance limits adopted by the Finance Committee under Canon 8.04(c)(vii).

Proponent’s Explanation: 

Episcopal Church Canon I.7.1(h) and Diocesan Canons 8.04(c)(vii) and 19.07 authorize the Finance Committee to ensure that all congregations and other affiliated organizations maintain adequate insurance. However, existing canons do not specify the procedure for congregations to change their insurance coverage if they wish to do so. Currently nearly all congregations are insured by Church Insurance Company, a “captive” insurance company owned by the Church Pension Fund. Church Insurance Company also serves as the Diocese’s risk management consultant and provides detailed reporting to the Diocesan Office so that the Finance Committee can carry out its responsibilities under these canons. A small number of congregations are insured by Church Mutual Insurance Company, which generally provides acceptable insurance coverage but does not provide the additional reporting.

Most other dioceses adopt a schedule of minimum acceptable insurance limits so that they can easily shop for coverage from carriers other than Church Insurance Company without having to obtain prior approval from the diocesan finance committee. These canon amendments would specifically provide for our Diocese’s Finance Committee to do the same.

Upon adoption of these amendments, it is anticipated that the Finance Committee will adopt one or more schedules of acceptable insurance limits and that it will approve the two insurance carriers in broad use, Church Insurance Company and Church Mutual Insurance Company, as well as other carriers that meet industry standards.

An unrelated amendment to Canon 8.04(c)(viii) would specifically permit persons who handle funds to be covered by fidelity insurance rather than bonding. Fidelity insurance is the prevailing form of coverage in the insurance market and is already provided as part of standard policies issued by both Church Insurance Company and Church Mutual Insurance Company.

Submitted by:  The Finance Committee; Christopher Hayes, Chancellor, christopher.hayes@borowsky.com.

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