In the mid-1980s, liability insurance for municipal governments in British Columbia was a nightmare.
With insurance premiums rising at a feverish pace — over half of the Union of B.C. Municipalities’(UBCM) membership saw rates increase by 500 per cent or more by 1985 — it was clear something needed to be done. Local government officials across the province were dealing with massive deductible increases. On top of that, coverage limits had dropped to $1 million or $2 million per claim.
The impacts could be huge, raising property taxes while possibly limiting the types of programs and services a municipal government could provide.
Enter Dan Cumming, former Squamish-Lillooet Regional District chair, and one of the main driving forces behind the formation of the Municipal Insurance Association of British Columbia (MIABC).
To mark its 25th year of operation, the MIABC instituted a Lifetime Achievement Award, naming the 80-year-old Cumming as one of its first three recipients in a ceremony last month recognizing his many contributions to the organization and its subsequent success.
“I was very honoured to receive it,” said Cumming, who now resides in D’Arcy with his wife.
But the chartered accountant and former UBCM president — a role he filled concurrent with his position as the SLRD chair — was quick to downplay his achievements.
“It was not all my work, I just sort of picked up the political slack,” he said. “I used to say when I was involved with this stuff, ‘the only thing you need to do is act like a British officer and know how to die well. If somebody gets a hate-on for you, you have to fall on your sword.’”
With the liability insurance crisis in full swing, the UBCM established a task force in 1987 to determine if municipalities could join together in a self-insurance pooling program, similar to those employed in the U.S. and Australia at the time. Cumming was instrumental in leading the task force through its deliberations and curried political support for the establishment of the MIABC at the time.
“One thing we knew we could was set up our own insurance company, so we looked into that and ran into a brick wall and couldn’t find anybody who’d tell us what it was going to cost,” Cumming said.
After discussing it with an American municipal insurance company, the task force identified what the cost would be to set up the cooperative, and determined that at least 85 per cent of UBCM members would need to get onboard to ensure its success.
“We did a diligence study of how many people wanted to get involved, and it came up to 83 per cent or thereabout. So I approached the membership at the next annual general meeting to tell them we didn’t make it, we missed it by two per cent,” Cumming explained. “There was silence in the hall for a minute, and somebody in the back — who I just found out was the mayor of Kamloops — said ‘Oh for God’s sake Dan, just get on with it.’ So we started the Municipal Insurance Association.”
Cumming would then go on to serve as chair of the MIABC’s first board of directors, a role he held until 1996, and ushered the organization through its critical early years.
Recognizing that municipalities had been grossly overcharged in years past, one of the first measures Cumming oversaw was the reduction of insurance premiums by half. Different from regular insurance companies, the MIABC could retroactively assess municipalities and if a mistake was made one year, it could be corrected the next, providing the organization with “a failsafe,” according to Cumming.
“The end result is it was a wild success: we got millions of dollars in the bank, we started people thinking about risk management and it worked like a dream,” he added.
In the end, it was Cumming who carried the sword, slashing insurance premiums and establishing the foundation of B.C.’s municipal insurance system in the process.