The Trust/APA/APAPO New Business Relationship: Frequently Asked Questions
Former Business Arrangement: The American Psychological Association Insurance Trust (The Trust) was established by APA in 1962 as a separate and distinct legal entity from APA controlled by an independent Board of Trustees. The purpose of The Trust is to provide professional liability insurance and financial security products to APA members, individuals associated with such members and other mental health professionals. The Trustees and The Trust have a responsibility to maintain a stable program of insurance for the policyholders listed above. Pursuant to the original Trust Charter, APA has been involved in limited ways in the internal governance of The Trust, including currently having Trustee appointments for APA’s CEO and Treasurer. APA membership has been a requirement for gaining access to The Trust’s products and services.
New Business Arrangement: The Trust continues to operate as a separate and distinct legal entity. The Trust Charter will be revised to remove APA involvement in the internal governance of The Trust, including the elimination of the ex-officio Trustee appointments to The Trust Board for APA’s CEO and Treasurer. The new business arrangement will allow The Trust the autonomy to deal with the array of business decisions it faces and is best qualified to make, such as what products and services to provide and to whom. While The Trust will continue to offer insurance and financial products and services to APA members and individuals associated with such members, The Trust will now also have the ability to offer such products and services to non-APA members and other mental health and allied health providers.
Under the terms of the new business arrangement, APA will receive a one-time payment from The Trust totaling $6.25M which will be paid over the next 24 months. Going forward, The Trust will be the sole authorized and preferred insurance provider for APA and APAPO members under a five-year agreement, for additional payments totaling $3.75M. The majority of these prospective payments — $3,525,000 — will be designated to the APAPO to support its mission. Taken together, these payments from The Trust will provide a critical new revenue stream to APAPO and APA to fund their respective mission-related work including advocacy for appropriate reimbursement for psychological services, research funding, mental health care access and quality in psychology education.
Rates: There will be no increase in rates for any of The Trust’s products (Professional liability policies, Liberty Mutual policies, Business Owners Policies and Directors & Officers Liability policies) due to the new business arrangement.
Terms & Conditions of Policies: There will be no change in the terms and conditions of The Trust policies due to the new business arrangement.
Insurance Carriers: The Trust will continue to use the current insurance carriers.
Risk Management Services: The Trust will continue to offer all of the current risk management services.
Customer Service Representatives: The Trust’s customer service representatives will continue to service policyholders.
Business Expansion will Benefit All: The Trust will continue to operate as it has been since 1962 but now has the ability to capitalize on new opportunities to enhance and expand the insurance and financial products and services offered to policyholders.
Products & Services Created by Psychologists for Psychologists: The majority of Trustees on the Board will continue to be psychologists; other Board members are insurance, business or other professionals. The CEO of The Trust is a psychologist. As such, The Trust is keenly aware of psychologists’ insurance needs.
Financial Strength: The Trust’s financial position is strong and will only grow as it expands products and services and its policyholder base.
Expanded Markets: The revised Trust document allows the Trustees to expand sales to non-APA member psychologists to facilitate maintenance of the strength and stability of The Trust insurance programs for all policyholders.