CPA Mutual - Celebrating 20 Years!
By Bill Thompson, CPA, RPLU
President, CPA Mutual
In case you don't know it, CPA Mutual is celebrating its 20th year of operations this year! It's hard to believe it has been that long.
CPA Mutual was formed in 1986 to help alleviate a hard market for accountants' professional liability. Many of our members at that time could not find affordable malpractice insurance. Carriers dramatically increased premiums and reduced available limits. And some sent out nonrenewal notices, called it a day and left firms scrambling to find coverage.
In response to pleas for help from firms throughout the country, approximately $42,000 was raised to prepare a feasibility study to look into the formation of a member-owned "captive" insurance company. It was believed that a member-driven company would be more responsive to its members and provide a long-lasting solution to this critical issue.
The company petitioned the Vermont Commissioner of Banking, Insurance and Securities for a Certificate of General Good and received the certificate on Jan. 16, 1987. The company was subsequently incorporated by the secretary of state on Jan. 19, 1987.
On Jan. 30, CPA Mutual received its Certificate of Authority to transact the business of an association captive insurance company, as defined by 8 V.S.A., Chapter 141, Section 6001 (3). The company then revised its application to the department to be authorized to operate as a "risk retention group," as defined by the Federal Liability Risk Retention Act of 1986, and in 8 V.S.A., Chapter 141, Section 6001 (9) (B), and was issued a revised Certificate of General Good on June 18, 1987, and a revised Certificate of Authority on June 19, 1987.
On June 22, 1987, CPA Mutual received from the secretary of state a Certificate of Amendment adding the words "Risk Retention Group" to its corporate name. The company was formed under the sponsorship of interests of an association of certified public accounting firms known as Accounting Firms Associated, inc. (now CPAmerica International), a Florida nonprofit corporation.
The company began writing business with an effective date of July 1, 1987.
That first year, CPA Mutual offered limits of up to $1 million, issued 181 policies and recorded $3,043,008 in surplus. It now offers limits up to $5 million, insures 784 firms and has over $10.6 million in surplus. And over the span of 20 years, CPA Mutual returned over $14 million in policy holder premium dividends.
More importantly for our members, CPA Mutual serviced 1,644 claim matters and paid or incurred $118,773,489 in claims cost!!! Not bad for a member-driven and member-owned company!
Your policy coverage has been broadened multiple times with coverage added for outside defense cost, aggregate limits and deductibles and, more recently, electronic data coverage. CPA Mutual also has expanded coverage to include employment practices liability as well as a limited policy for small firms that do not provide attestation services. Our focus continues to be the CPA market.
It’s been an exciting and fulfilling 20 years. All of us here at CPA Mutual appreciate the confidence and continued opportunity to serve you, both our current and prospective members. We look forward to another 20 years of continued success and service.
CPA Mutual…our goal is to exceed your expectations!