In the November 2023 issue of News & Notes, we cover the following topics: Thanksgiving break closing checklist and reminders, minimizing virus outbreaks at the chapter house, kitchen safety reminders and recommendations, and we share a webinar about designing with Gen Zers in mind.

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As winter arrives, it is important that we consider the potential of freeze claims, especially during breaks for the upcoming holidays. Preventing frozen pipes is probably the most important consideration over the winter breaks, but closing the chapter house before Thanksgiving break involves several additional tasks to ensure that everything is in order and secure. Here’s a checklist we’ve developed to help:

Before break:

  • Schedule a house-wide cleaning. Make sure all common areas are clean and tidy, and that all personal belongings are removed from shared spaces.
  • Unplug all non-essential appliances. This includes electronics, lamps, and small kitchen appliances.
  • Keep the heat on. Set the thermostat at or above 60 degrees during breaks to ensure the pipes don’t freeze.
  • Dispose of perishable items in the kitchen. 
  • Close all windows and doors securely. This will help to keep out pests and drafts.
  • Lock all doors and windows. Make sure all windows and doors are locked.
  • Notify the police and fire department that the house will be vacant. This will help to ensure that they are aware of the situation in case of an emergency.

During the break:

  • Have someone check on the house regularly. 
  • Shovel snow and ice from the sidewalks and walkways. This will help to prevent slips and falls.
  • Clear any fallen branches or other debris from the yard. This will help to prevent damage to the house or property.

After returning:

  • Check for any leaks or damage to the house. Contact Heather Cox, MJ’s Claims Service Manager, if you notice any damage. 
  • Turn up the thermostat and let the house warm up.

Additional tips:

  • Leave a list of emergency contact information in a visible location. This could include the names and phone numbers of the House Corporation President, house director, and local police and fire department.
  • Consider having a professional plumber winterize the house for longer breaks. This will help to prevent pipes from freezing.
  • Consider installing a water detection/heat monitoring system. Learn more here.
  • Review our resource on preventing frozen pipes. Be prepared before cold temperatures arrive by reviewing our resource on preventing frozen pipes in the first place.
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This edition of the MJ Sorority newsletter covers the following topics: chapter security webinar, winter driving reminders and infographic, preventing check fraud, 2024 economic outlook, FAQs, and more.

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We have recently had several claims involving fraudulent checks. Sororities aren’t the only victims. In an alert sent out in February, the Financial Crimes Enforcement Network, also known as FinCEN, reported that, “Despite the declining use of checks in the United States, criminals have been increasingly targeting the U.S. Mail since the COVID-19 pandemic to commit check fraud.” Criminals are becoming increasingly sophisticated in their methods, making it crucial for organizations to stay vigilant. These fraudulent activities encompass a range of tactics, including counterfeit checks, altered payee information, and even identity theft to gain access to legitimate bank accounts. As a result, it is imperative for chapter and house corporation officers and volunteers to be aware of these risks and adopt strategies to mitigate the threat of check fraud. We recommend the following strategies:

  1. Secure your checks: Store your checkbook, blank checks, and deposit slips in a secure and locked location. Limit access to these items to only trusted individuals. Consider using a secure check stock with built-in security features like watermarks or microprinting.
  2. Try and limit exposure by reducing check use. Transitioning to electronic checks and digital payment methods reduce the risk associated with paper checks.
  3. Make sure you’re following internal safety measures. Chubb Insurance, the insurance company who writes your Crime Insurance Coverage, has some basic risk management rules and guidelines for the entities under your organization’s national insurance policy. These conditions are referred to as “required conditions” and list out specific requirements in the financial management to ensure that there is dual control of the financial transactions at all times. These measures help prevent check fraud, as well as other financial crimes. Read more here.
  4. Consider Positive Pay: Enroll in Positive Pay services offered by your bank. This service helps detect discrepancies by matching the checks presented for payment with a list of authorized checks you’ve issued. Positive pay procedures set permissions in a checking account, so the company gets confirmation before a check or ACH Debit against your company is processed. ACH: ACH stands for Automated Clearing House and is a network that transactions pass through in the United States. The network exists to manage the transfers and organize them. ACH debit is the transaction executed through the Automated Clearing House Network.
  5. Train employees and volunteers: Educate employees and volunteers about the risks of check fraud and teach them how to recognize signs of suspicious activity. Ensure they understand the importance of safeguarding sensitive financial information.
  6. Stay informed: Keep yourself informed about the latest trends in check fraud and adapt your prevention strategies accordingly. Criminals continually evolve their tactics, so staying up-to-date is essential. Count on MJ Sorority to continually monitor the trends and communicate new strategies to you.
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This edition of the MJ Sorority newsletter covers the following topics: property market insurance update, building a reserve fund, addressing check fraud , 2024 economic outlook, FAQs, and more.

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Background
Over the past five years, property insurance companies have faced significant challenges in maintaining profitability. A surge in catastrophic claims, changing weather patterns, and rising temperatures have contributed to this crisis. Factors such as the increasing severity of claims, dramatic rise in material costs, and historical underinsurance have compounded the problem. Additionally, there has been a startling rise in the number of billion-dollar disasters. These issues have forced insurance companies to implement rate increases, reduce coverage limits, and modify terms and conditions. The situation reached a breaking point with the devastating Hurricane Ian and subsequent winter storm of 2023. We are now in the midst of the worst property insurance market the industry has ever seen.

The Changing Landscape
The current state of the property insurance market demands a shift in the way insurance is approached. Insurers are being forced to move away from acting as quasi-warranty replacement policies and focus more on covering larger or catastrophic claims. Property owners must prepare for higher property deductibles and invest in building modifications and maintenance measures that reduce potential weather damage and the extent of damage. The industry is refining its underwriting strategies for risks such as tornadoes, wind, hurricanes, floods, wildfires, hailstorms, and freezes. Predictive modeling is getting more sophisticated and accurate, enabling insurers to better assess risk based on big data, the increasing speed of climate change, and subsequent specific locations prone to particular risks.

The crisis is not isolated to a single insurance company but is affecting the entire industry. The reinsurance market, heavily impacted by Hurricane Ian, is facing a day of reckoning. Rate increases and adjustments to coverage limits, deductibles, exclusions, and limitations have become prevalent. This situation poses challenges for insurance providers and agents, as many markets have declined coverage due to a concentration of residential frame housing values, as we already seeing in Florida and California.

Facing the Current Situation

MJ Sorority has shielded clients from market volatility in the past (see graphic) but now is being forced to address the evolving landscape. The insurance provider for the MJ Sorority Program, Travelers Insurance Company, informed us that they would be addressing conditions, rates, and deductibles upon each client’s renewal. Travelers’ actions are indicative of industry-wide changes that require careful consideration. Rest assured that unlike what we’re seeing in the homeowners’ markets[1], capacity and coverage are not at risk.

Conclusion
The property insurance market is facing unprecedented challenges due to an array of factors. Insurers and insureds alike must adapt to the evolving landscape by embracing a new business model that emphasizes coverage for larger or catastrophic claims. Increased property deductibles, building modifications, and refined underwriting practices are crucial steps. The industry’s focus on predictive modeling and big data can help allocate risk more effectively. MJ Sorority understands the difficulties posed by the crisis, and we are dedicated to enhancing risk management advice and resources, particularly regarding wind and hail perils, both at the headquarters level and among local housing volunteers.

By working together, insurers and insureds can navigate the perfect storm and ensure continued protection against unforeseen property losses. Please do not hesitate to reach out to your Client Executive with questions and concerns.

[1] For further reading about the insurance market, refer to the links embedded in the document above or review the following links fur further reading:

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This edition of the MJ Sorority newsletter covers the following topics: property market insurance update, back to school risk management resources, 2024 economic outlook, FAQs, and more.

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National fraternities and sororities have been dealing with changing circumstances on many fronts over the
last five years. Part of this changing landscape involves property management and adapting to significant
increases in property claims across the nation. As a result, property owners must prepare for higher property
deductibles, due to the increase in the frequency of claims and in the increase in the severity (cost) of claims
than in years past.

It is critical to an organization’s sustainability to have adequate short-term cash reserves and liquidity resources
for operational flexibility and for ensuring that organizational commitments are met timely. Beyond short-term cash reserves, fraternities and sororities should also consider building reserves to fund insurance
deductibles as claims are incurred. Such reserves (often designated by the Board of Directors) are funded so
that intermittent claims can be managed without disrupting already tight operating budgets.
In considering building an insurance reserve fund, organizations should consider the following areas:

  • Understanding the risk landscape (past, present, and future) – collaboration with an organization’s current insurance provider and property managers or housing team members can aid in understanding what claims have been incurred, properties at risk for issues now, and what deferred maintenance issues might be present in the future. Understanding risks by geographic location as it relates to weather and catastrophic events is also helpful in determining how much to reserve and how sustainable that reserve will be over time. If you are unsure of your house corporation’s loss experience, contact your Client Executive at MJ Sorority.
  • Starting a reserve fund – organizations can formally designate funds (through Board resolution) to function as an insurance reserve that cannot be spent on other purposes. This can formally separate these funds from operating cash and other financial assets and keep reporting and tracking of these funds segregated within the organization’s financial statements. Organizations can also fund a new reserve by designating surplus dollars annually be deposited into an insurance reserve. Creating a one-time assessment charged to members, or charging a new annual fee are also options to establish a reserve fund or continue to fund reserves.
  • Investing your reserve fund – organizations need to consider where reserve funds will be housed and how they will be invested. Organizations should consider a separate investment policy statement for reserve funds. Keeping reserves in short-term insured bank accounts allows for some return on those funds without taking on market risk. Certificates of deposit or sweep accounts can also be used if they do not lock up all funds for specified periods of time. Depending on the size of the reserve, it might make sense to invest in longer-term opportunities to increase investment return. In all cases, liquid cash will need to be accessible to some degree for those claim deductibles should they occur.
  • Drawing from your reserve fund – organizations also need to consider how to spend from reserve funds. A policy on spending should be established and should include what constitutes an approved expense, how often reserves can be drawn upon, and what approvals are needed to draw (approvals usually involve Board or Finance Committee approval). Determining a minimum threshold that must be left in the reserve at all times should also be considered.

Blue & Co.’s Not-for-Profit Services Team advises organizations on ways to improve both the balances and the utilization of reserves and liquidity resources to enhance sustainability over time. Please reach out to your local Blue & Co. advisor with any questions regarding these recommendations.

Thanks to our partners at Blue & Co. for this resource.

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This edition of the MJ Sorority newsletter covers the following topics: property market insurance update, summer risk management resources, reviewing contract basics, and more.

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This edition of the monthly MJ Sorority newsletter covers the following topics: building projects, summer closing checklist, chapter house self-inspection form, sprinkler system update, Housing Forum replay with Marlon Gibson, PhD, cybersecurity webinar, what to look for when reviewing a contract FAQ, and more.

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This edition of the monthly MJ Sorority newsletter covers the following topics: spring weather resources, important update about sprinkler credit, risky activities, Housing Forum session from Dr. Marlon Gibson, mental heath webinar, FAQ about workers’ compensation, and more.

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This edition of the monthly MJ Sorority newsletter covers the following topics: highlights from the 2023 MJ Housing Forum, risk management advice for hail season, cybersecurity prevention, FAQ about passenger vans, and more.

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