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Hopkinton selectmen vote to switch property insurers, ditch Local Government Center

Last modified: 6/12/2013 2:30:29 PM
Citing fallout from a recent legal dispute with their current and longtime provider, Hopkinton selectmen voted, 3-2, last night to switch property liability insurers from the Local Government Center to Primex beginning next month.

The vote came a week after the board hit a 2-2 standstill on the same vote, with George Langwasser absent on vacation. Members voted last night the same as they had the week before, with Selectwomen Sara Persechino and Sue Strickford opposing the move because they said they were more impressed with a presentation at a previous meeting by LGC representatives.

Langwasser and Chairman Jim O’Brien each said they favored moving to Primex in part because of their lingering distrust of the LGC, which they do not believe compensated the town adequately for its highway garage that was destroyed in a fire last year. The town settled the dispute earlier this year, but Langwasser and O’Brien estimated that tangle had cost the town $300,000 in lost compensation.

“I must admit I have a very sour taste in my mouth and mind,” Langwasser said of the LGC, before an empty room except for a lone reporter.

The board began weighing a switch earlier this year after reaching the garage settlement, and eventually narrowed the choices to Primex and the LGC, which both deal in risk pools for municipalities. Town Manager Neal Cass said both insurers had offered comparable premiums and benefits to the town.

Hopkinton has been insured by the LGC since 1986, Cass said.

But Primex manages the town’s workers compensation coverage and had offered a 10 percent package discount on the property liability premium, in addition to a roughly $3,000 discount on the workers compensation premium. Given the discounts, the property liability premium will be about $61,000, though that will increase when construction on the town’s new highway garage is completed later this year, Cass said.

Strickford and others voiced concern that leaving the LGC could jeopardize a $12,000 refund payment the board expects to receive from the group in August. The LGC, which is undergoing a massive restructuring after its director resigned earlier this year and after it came under fire from the state for past business practices and a 2003 corporate reorganization, was ordered last year to return more than $52 million in improperly retained surplus funds to its members. The group has appealed the order to the state Supreme Court. Meanwhile, several towns that are no longer insured by the LGC have complained that the group is denying them their part of the mandated refunds.

But O’Brien advised the board to set that issue aside temporarily, explaining that the town will pursue the refund regardless of whether it is still insured by the LGC. In the end, he said, he felt more comfortable trying a new provider.

Langwasser agreed, and noted that it was impossible to tell how the LGC’s current restructuring would impact customers in the future.

“Where that is going to end, we don’t know,” he said.

But Persechino, who joined the board earlier this year after the garage settlement was reached, said she had tried to disassociate her choice from the fire dispute, and in so doing, she had thought the LGC’s presentation was stronger than Primex’s.

“I was much more impressed with LGC’s knowledge and the experience of its staff members,” she said.

The new insurance will cover the town through June 2014.

(Jeremy Blackman can be reached at 369-3319, jblackman@cmonitor.com or on Twitter @JBlackmanCM.)


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