School district superintendents and board members often turn to groups such as the Oklahoma State School Boards Association and the Organization of Rural Oklahoma Schools for advice when it comes time to select an insurance provider or make other complex decisions.
What school officials may not know is these professional organizations receive money back from some insurance providers when schools choose their products.
For instance, the Oklahoma Schools Risk Management Trust (OSRMT) paid the Oklahoma State School Boards Association (OSSBA) nearly $150,000 in royalty payments for the 2013 fiscal year.
The most recent audit of the trust’s finances, which is available on the state Insurance Department’s website, states that the royalty agreement “grants OSRMT the exclusive right and license to use the OSSBA name and logo in connection with the marketing and administration of the insurance programs offered by OSRMT.”
A similar financial arrangement existed between the Organization of Rural Oklahoma Schools (OROS) and the Oklahoma Schools Property and Casualty Cooperative (OSPCC).
Sponsor of co-op
Perry Willis, executive director of the OROS, told The Oklahoman that his organization “received 1 percent of yearly sales for sponsoring OSPCC.” The cooperative has decided to go out of business and 42 of its 43 members have switched to OSRMT, the co-op’s board chairman said.
Willis, who is listed as a member of OSPCC’s board of directors on the cooperative’s website, said OROS has received $19,510 during the current fiscal year, which ends June 30.
“We agreed to (be a) sponsoring entity, provided they were approved as an interlocal cooperative and met all legal requirements of a coop,” Willis wrote in a prepared statement to The Oklahoman.
“As far as recruiting schools, I would say that we recommended our membership (350 school districts) to get a quote from them and compare it with all other quotes they received and make their decision based on what was best for their district,” he said.