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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Semi-annual email newsletter sent to chapter presidents, officers, and chapter advisors.

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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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Review and implement the following steps as needed.

  • Turn on headlights while in a parking garage (during daytime too) to reduce the risk of an accident and to better see people and other cars.
  • Park in areas that are well lit.
  • Refrain from walking in the middle of the lane in a parking garage, do not text while walking, and make use of marked crosswalks.
  • If walking by yourself, get off your cell phone.
  • Drivers entering a parking lot keep an eye on a vacant spot and often neglect to watch for other drivers and pedestrians who are on the move.
  • While backing out of a parking space in a parking garage, blind zones created by vehicles parked alongside the spot obstruct the driver’s vision.
  • Traffic laws aren’t enforceable in parking lots, which can create reckless driving and confusion.
  • One thinks that being on the phone is safe because the person on the other line can call 911, but that rarely works out.
  • Chatting can distract you; it’s better to be aware of your surroundings.
  • If walking alone, hold your cell phone and be ready to make an emergency call.
  • Many phones now have a button on the screen to dial 911 immediately.
  • Go one step further and preset one of the buttons on your phone to call the emergency number.
  • Look underneath your car before approaching it in a parking garage or lot at night.
  • If you return to your car and see that a van is parked right next to the driver’s side, enter through the passenger side.
  • Predators often use vans and will disguise it as a family car, even using “Baby on Board” decals.
  • If you return to your car and it has a flat tire, back away, return to wherever you came from (restaurant, store, etc), and call for help.
  • Once assistance arrives, approach your car. If someone comes up to you and wants to offer help, politely say, “No thank you.”
  • When you are checking in to a hotel room, ask the front desk staff to write your room number down privately so that no one hears what your room is. Your room number should be your business only.
  • Before entering your hotel room, make sure no one is lingering in the hallway.
  • Always immediately lock your hotel room door after you enter.
  • When traveling, do not walk with your map in your hand. It is a dead giveaway that you are a tourist. Therefore, you are an easy target.
  • If you call for room service, and you get a knock on your door, do not immediately open. Ask: “Who is it?” Make the person on the other side of the door tell you who they are before you open it.
  • When asking for directions and someone offers to show you the way by having you follow them, do not go. Just ask for them to point you in the right direction.
  • If someone tries to grab you, twist your arm up and down and yell, “Stop!”
  • Do anything you can to draw attention to yourself.
  • If someone is chasing after you, run away in a zig-zag pattern which is known to exhaust attackers.
  • Before booking a hotel, make sure that guest-room doors have multiple locks, including a deadbolt.
  • Consider using a valet, or park your car in a well-lit area as close as possible to the hotel lobby.
  • Before getting out of the car, scan the parking lot for any possible assailants. Lock the car and do not leave any valuables inside.
  • In high-rise hotels, request a room on the third floor or above.
  • If hotel personnel mention your room number during check-in or another time during your stay, ask for another room.
  • Don’t enter an elevator if someone inside seems suspicious.
  • Don’t open the room door to anyone without verification from the front desk, and do not use your name when answering the phone.
  • Place all valuables in the in-room safe.
  • Hang the “do not disturb” sign on the door and leave a light and radio or TV on when leaving.
  • At night or any time there’s concern about safety, request a hotel staff member to accompany you to your room to inspect it.

Source: ChubbWorks.com

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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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This edition of the monthly MJ Sorority newsletter covers the following topics: winter storm update, winter driving tips, FAQ about volunteer’s insurance recommendations, preventing frozen pipes, preventing slips and falls.

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