The AIA Commended Professional Liability Program: Looking Out For Member Interests

The AIA Board of Directors has established commendation criteria by which to select and evaluate the provider for the AIA Professional Liability Insurance Program. These criteria help to ensure that the Commended Provider offering is the best able to address critical factors for members. The criteria, periodically updated to adapt to changing market conditions, establish basic business standards and create a collaborative relationship with the insurance provider. The criteria may be found at the AIA Trust web site, www.TheAIATrust.com, under the button for professional liability insurance.

In order to ensure that AIA member interests are best addressed by the Commended Program, the AIA Trust and the AIA Risk Management Committee (RMC) decided in March 2006 that a Request for Proposal (RFP) for the professional liability insurance program was imperative. This proposed initiative resulted from discussions following the CNA-proposed changes to the Commitment Plus program and the need to obtain data related to rate-making for the professional liability insurance program.

While an annual review of the Commended Program is conducted by both the AIA Trust and AIA RMC to ensure compliance with the AIA Commendation Criteria, an RFP had never been conducted on the program to evaluate other options. The AIA Trust and AIA RMC participate annually in an insurance survey of all the professional liability insurance providers and publish the results on the AIA and the Trust websites.

AIA Management, the AIA Trust and the AIA Risk Management Committee solicited interested participants in the RFP from among the 14 insurers that responded to the annual insurance review survey. Seven insurers indicated interest in the RFP and being considered as the Commended Carrier. The RFP itself was developed by AIA Trust insurance consultant, Fredric Schultz CPCU, of Insurance Buyers’ Council, Inc. (IBC) in consultation with the AIA Trustees, Members of the AIA Risk Management Committee, and AIA Management. The RFP was based on the AIA Commendation Criteria, the current program, results of a member survey on professional liability insurance, and discussions held with various AIA entities on what is needed from the Commended Program.

The RFP was sent in March 2007 to the seven interested parties with a response deadline and three proposals were received by the deadline. Each of the three insurer finalists made presentations to the AIA representatives and were evaluated on their response to the principal components of the RFP, weighted by importance to the Commended Program. Based on the AIA Commendation Criteria and various components of the RFP, it was determined that Schinnerer best met the criteria and the RFP requirements.

The AIA Board ratified this decision at their September 2007 meeting and AIA Management successfully negotiated a three-year contract with Schinnerer for the Commendation of the Professional Liability Insurance Program in July 2008. After this period, the contract may be renewed or an RFP process may recommence. Other insurers have been encouraged to become competitive contenders and participate in future RFP processes in order to make viable choices available for the AIA Commendation.

While a time-consuming undertaking, the RFP process conducted by the AIA and the AIA Trust were done in the interest of “due diligence” to assure AIA Members of a thorough examination of marketplace offerings and of the commended provider itself. By identifying the provider best able to respond to these important criteria, the AIA member is better able to make one of their most important business decisions, their professional liability insurance.