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| IHG Insurance (National Insurance Provider) |
| Providing Community Association Insurance for over 25 years: D&O Liability, Crime Products, Umbrella Coverage and Property Manager's Errors & Omissions Liability. |
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GoldF
(Nevada)
Posts:6
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| 11/26/2008 10:45 PM |
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| one of ouuur board members is making money through his insurance buisness for our community. He has given a disclamer always about using his buisness for the homeowners insurance. Can you makemake money when u are serving on the board is that legal? and correct?. |
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RobertR1
(South Carolina)
Posts:2524
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| 11/26/2008 11:56 PM |
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Gold,
The answer to your question, without doubt, is yes, you can make money (I assume you mean in a business relationship with association).
But, not because you are a Board member. That has nothing to do with being paid for a service.
But, reality is reality and someone has to watch the hen house. Any service ANYONE provides to association has to past the bidding process and also the smell test. If it appears to to a conflict of interest, that needs to be addressed by the Board and a confirmation that no conflict of interest exists and signed by board members and entered into record. If this is a big insurance contract I would be extremely cautions and not handle this like arun of the mill contract. Wehave several insurance agents that are owners and some of them serve on our Insurance Committe and they review all insurance contracts. It took us a while to get this in place but it seems to work fine and all seem to admit, bizness is bizness. Look into doing it that way. |
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MaryA1
(Arizona)
Posts:2504
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| 11/27/2008 7:39 AM |
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Posted By GoldF on 11/26/2008 10:45 PM
one of ouuur board members is making money through his insurance buisness for our community. He has given a disclamer always about using his buisness for the homeowners insurance. Can you makemake money when u are serving on the board is that legal? and correct?.
Gold,
If the assn has acquired its insurance through the board member's insurance agency the potential conflict of interest should have been reported to the board b/4 they voted to acquire the insurance. If the other board members don't have a problem with this, and it's all out in the open, then there is nothing wrong. I doubt your assn docs address conflict of interest, however, you may want to check out state law to find out exactly how conflict of interest should be handled. Look in the nonprofit corp statutes and also in the HOA statutes, if there are any.
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GlenL
(Ohio)
Posts:1470
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| 11/28/2008 7:09 AM |
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You might also check out your Articles of Incorporation, this is what is in ours and it states the business relationship you describe would be allowed if everyone was aware of it. Note it even says the trustee may vote on the matter which I would discourage.
ARTICLE X
A Trustee or officer of the corporation shall not be disqualified by his office from dealing or contacting with the corporation as a vendor, purchaser, employee, agent or otherwise; nor shall any transaction, contract or act of the corporation be void or voidable or in any way affected or invalidated by reason of the fact that any director or officer of any firm of which such Trustee or officer is a member, or any corporation of which such Trustee or officer is a shareholder, director or officer, is in any way interested in such transaction, contract or act; provided, however, that the fact that such director, officer, firm or corporation is so interested be so disclosed to or known by the Board of Trustees or such members thereof as shall be present at the meeting of said Board at which action is taken upon such matters. No Trustee or officer shall be accountable or responsible to the corporation for or in respect to any such transaction, contract, or act or for any gains or profits realized by him or by any organization affiliated with him as a result of such transaction, contract or act. Any such Trustee or officer may be counted in determining the existence of a quorum at any meeting of the Board of Trustees of the corporation which shall authorize or take action in respect of any such contract, transaction, or act, and may vote to authorize, ratify or approve any such contract, transaction or act, with like force and effect as if he or any firm of which he is a member or a
corporation of which he is a shareholder, officer or director were not interested in such transaction, contract or act.
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SusanW1
(Michigan)
Posts:2316
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| 11/28/2008 7:34 AM |
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There re pros and cons for this situation.
Pros -
He SHOULD get you the best deal for the least premium.
He is always on call for questions.
He is responsible for providng the latest info.
AND should provide excellent service.
Cons -
The Members may see this as self-serving.
Be SURE the bidding process has been thoroughly done.
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