The Oklahoma Insurance Department is urging school districts insured under an interlocal agreement and those considering such coverage to first review the provider’s financial documents at http://www.ok.gov/oid/Interlocals.html.
“School leaders need to know that these types of arrangements are not regulated and are not backed by a guaranty fund,” said Oklahoma Insurance Commissioner John D. Doak. “I urge them to look at the financial statements so they can make a well-informed decision about the financial strength of the interlocal. The last thing we want is for a natural disaster or a major lawsuit to leave multiple schools in financial ruin. It’s important for school leaders to verify that these interlocal insurance pools are adequately protected from a significant loss before they sign on the dotted line.”
Local school districts often enter into interlocal cooperative agreements to pool their liability and property risks. Interlocals must file an audited financial statement with OID within 180 days after the end of their fiscal year. Failure to file a timely report may result in a $500 per day fine.
The statement must include the report of an independent certified public accountant, a balance sheet reporting assets, liabilities and equity, footnotes to financial statements and statements of operations, cash flows and changes in assets, liabilities and equity.