Risk Management Fees Explained
INDIANAPOLIS, Ind. - As you may know, during the 2010-2011 fiscal year, there were a number of risk management incidents that occurred throughout TKE Nation. The incidents ranged in severity from low to high risk and given the number of high risk issues we saw as an International Fraternity, some resulting in injury, hospitalization, and even death; adjustments must be made for the 2011-2012 year. Tau Kappa Epsilon aims to protect, educate, and keep our Fraters safe to, in turn, build Better Men for a Better World.
For the 2011-2012 year, each chapter’s risk rating was assessed by:
- Every chapter of TKE, who are also recognized by the host institution, is initially placed at a "Medium" rating. Those chapters who are continuing to operate as recognized chapters by the International Fraternity but not recognized by the host institution at which the charter exist are automatically placed at a "High" rating.
- Each chapter is assessed by the Director of Standards, Regional Director, and Finance Department at the Offices of the Grand Chapter. When assessed, the following is considered:
a. Risk management incidents during the previous fiscal year (2010-2011), both institutionally reported and/or OGC reported. These incidents are then assessed as low, medium, or high risk incidents using the matrix adopted from The University of Texas at Austin’s Risk Assessment Matrix. The "Event Planning and Risk Rating Scale" can be found at on tke.org. It is encouraged for every chapter who plans an event to use this scale in order to be as proactive as possible in reducing possible risky situations associated with the event. The risk rating of the incident involving the chapter was considered in the process.
b. Any and all documented reports of a chapter taking the initiative (outside of expected education required) to inform, educate, and protect their members and guests through risk reduction programming and/ or events.
c. The current chapter statement of the chapter, active payment plans, payment history of the chapter.
d. The minimum standards of Tau Kappa Epsilon and if the chapter is currently meeting these standards.
As a result of the increase in the Fraternity’s insurance cost and the chapter risk ratings based on the process above, the edited base rate per man for the 2011-2012 year is $229.58. The base rate per man, due to the increase in cost being absorbed by the high risk chapters as explained below, is actually lower than the 2010-2011 rate which was set at $235.64/ man.
To determine the number of men in the chapter who should be billed the base rate per man, TKE decreases the end of year chapter size by a 35% attrition rate. For example: If the chapter ended the year (May 31, 2011) with 42 men in the chapter (initiated and outstanding candidates included), 42 men is then multiplied by a 65% return rate (35% attrition rate), and the total, 27.3 men, will be the number billed for insurance. The 35% attrition rate (or 65% return rate) is provided to the chapter because it is understood that Fraters will graduate, transfer to another university, or for whatever reason not remain a collegiate member of the chapter in the following year.
For the 2011-2012 year, a chapter’s total insurance assessment, based on their risk rating and attrition rate, is explained below:
(For all examples below, assume the chapter size at the end of last year was 42 men. Once adjusted with the 35% attrition rate, the chapter will be billed for 27.3 Fraters.)
- Low – A chapter with a "low" risk rating as determined by the process above will receive a discount on their total insurance assessment for making the initiative, outside of the expected circumstances, to reduce risk within the organization. The chapter will receive a 10% reduction of the insurance assessment. An example is explained below:
a. Billed Assessment before discount - (27.3 Men)($229.58 Rate) = $6,267.53
b. Discount – ($6,267.53)(10% Discount) = (-) 626.75
c. Total Insurance Assessment - $6,267.53 – 626.75 = $5,640.78
- Medium – A chapter with a "medium" risk rating as determined by the process above will not receive a discount or surcharge on their total insurance assessment.
a. Total Insurance Assessment – (27.3 Men)($229.58 Rate) = $6,267.53
In addition to the standard discount and surcharge applied to those chapters, TKE is instituting an additional $25/man charge for every man billed with a "High Risk Chapter Rating". This is being implemented to offset the insurance increase the Fraternity was impacted with this year due to the high risk activities occurring in TKE Nation. Furthermore, it is only appropriate that those chapters who contributed to the insurance increase help the entire Fraternity off-set this cost by absorbing a portion of the amount.
- High – A chapter with a "high" risk rating as determined by the process above will receive an added surcharge and $25.00 per man fee on their total chapter insurance assessment due to determined high risk behavior and/or activities in the chapter.
a. Billed Assessment before surcharge - (27.3 Men)($229.58 Rate) = $6,267.53
b. Surcharge – ($6,267.53)(10% Surcharge) = (+) 626.75
c. Individual Fee – ($25.00)(27.3 Men) = (+) $682.50
d. Insurance Assessment - $6,267.53 + 626.75 + $682.50 = $7,576.78
Effective September 1, 2011, all chapters who partake in high risk activity furthermore resulting in a high risk incident occurring will be assessed an immediate $500.00 fee to be paid directly to The Offices of the Grand Chapter. The timeline for complete payment of this charge will be decided at the point to which it is assessed. The $500.00 will be placed into an educational account for the chapter to then use and send members to educational opportunities programmed by Tau Kappa Epsilon (RLC & Conclave). If the money is paid to the OGC and not used to attend a leadership conference of the Fraternity during that year, the funding is then subject to be used in the overall cost and funding of said educational conference and no longer be available to for the chapter to use. This is being done in an effort to encourage education of our members in all areas of the TKE Fraternity experience.
Based on the examples shown above and using the numbers of an average chapter size in TKE Nation, a chapter which condones high risk behaviors or activity will in turn endure an increase in their insurance coverage. This increase, on average, is equal to approximately $45.00 more per man than a chapter at a "low risk rating". However, this average increase will vary depending on the number of men retained in the chapter from the previous year. If a high number of men are retained from the previous year, the increase per man is lower; if a lower number are retained for the next year, the there will be a higher increase per man. It is our goal to continue educating our Fraters through opportunities offered on behalf of the Fraternity and institution. Listed below are proactive measures the chapter can take to be in a position to be labeled as a "low risk" chapter in TKE. These examples are not the only proactive steps the chapter can take and do not guarantee that they will be placed at a "low risk" status when the risk ratings are revisited in June 2012 for the 2012-13 billing. Please let these serve as ideas and areas The Offices of the Grand Chapter are looking for our men to be educated around to remain safe and provide the best fraternal experience for members and guest of the chapter.
To be considered for assessment as a low risk chapter for the 2012-13 year in TKE:
- The chapter will not have any High Risk Incidents in the 2011-2012 fiscal year.
- The chapter will act in a proactive manner in assuring the safety of the members, guests, and overall chapter in any/ all events and activities.
- The chapter will continue efforts, outside of the expected risk management requirements already in place, to educate the chapter and its members on risk reduction practices.
a. Attendance at any programming facilitated and/ or supported on by the International Fraternity:
i. Regional Leadership Conferences (RLC)
ii. Province Educational Conferences (PEC)
iii. Training for Intervention Procedures (TIPS) Certification
b. Having a working Social Event Policy in place that outlines how to run a social event in the chapter and what to do if a crisis arises.
c. Hosting and/ or attending a speaker at the chapter, with the Greek Community, and/ or with the campus community on risk reduction.
d. Attending campus based workshops and programs discussing risk reduction techniques and/ or practices.
The chapter will report any proactive education/ efforts made by the chapter to the
Regional Director, Associate Regional Director, and/ or
Director of Standards to ensure that efforts have been made appropriately and the OGC is aware of the said efforts.
All of the afore mentioned actions have been made to help the chapter, and you, become a low-risk group. It is our desire to get each chapter and colony down to this level through our partnership. Education is the key to understanding what the risk levels are and how to make your chapter the safest it can be. We are all in this together. The TKE Nation is building Better Men for a Better World and it all starts with insuring our Risk Management is second-to-none. If you have questions or concerns, please email or call your
Regional Director at the Offices of the Grand Chapter (317.872.6533 or
email).
Yours in the Bond,
Steven A. Ramos
Chief Executive Officer
Be sure to follow the latest TKE News with the RSS Feed, on Twitter or the official TKE Facebook Fan Page. Submit your news today.
Share