More About the Insurance Trust

The Pennsylvania Bar Trust was established on August 9, 1949 to secure a life insurance and an accidental death and dismemberment insurance plan for the members of the Pennsylvania Bar Association and their employees.

It was amended on November 11, 1967, to restate the Declaration of Trust to more clearly define the powers and duties of the Trustees, and subsequently, on November 9, 1968, was divided into two trusts to be known as the Pennsylvania Bar Trust Fund and Pennsylvania Bar Insurance Fund. Both funds are controlled by the Trustees who are appointed annually by the Board of Governors of the PBA.

The Trust Fund was established to provide funds to promote educational and charitable purposes associated with the legal profession and the administration of justice with particular reference to the promotion of such purposes within the Commonwealth of Pennsylvania. It was originally funded through the contribution of dividends by all policyholders participating in the insurance plans, and the experience credits earned by the plans under the master group insurance contract. The current master plan does not yield dividends and the only source of income to the Trust Fund is through its portfolio, which is managed by the Trustees.

The primary focus of the Trust is to assure that funds are expended in the furtherance of its purposes; however, it may not engage or support any activity that would prevent the Trust from qualifying as a 501(c)(3) organization as described in the Internal Revenue Code.

The Insurance Fund was established to provide and monitor the insurance plans offered to all members of the Association and their employees. This fund was established as a separate entity and funds held by the Insurance Fund must be segregated from the funds held by the Trust Fund. The Trustees do have the authority to transfer any excess funds accumulated in the Insurance Fund to the Trust Fund. Funding for the Insurance Fund is through Royalties and Loss Control Funds through various insurance programs, most notably the Professional Liability Insurance program.

The Trustees are empowered with the authority to administer and control both the Trust and Insurance Funds. A Trustee is appointed to a term of four years and may not serve more than two successive full terms. The officers of the Trust shall be Trustees and shall consist of a Chair, a Vice-Chair, a Secretary and a Treasurer. Officers may serve more than one term. The terms of the Chair and the Vice-Chair are two years and begin on July 1 after their election and end on June 30 of the second following year. In any year in which the term of the Chair or Vice-Chair expires, a Chair or Vice-Chair is nominated by the President of the Association, immediately after he or she takes office, and elected by the Board of Governors. The Secretary and the Treasurer are nominated and elected by the Trustees, to serve at the pleasure of the Trustees. Any vacancy that occurs in the office of Chair or Vice-Chair arising from death, resignation, disability or otherwise shall be filled for the unexpired term of such Chair or Vice-Chair by nomination by the President and election by the Board of Governors at its next meeting. Typically, the Trustees meet in person twice a year and have conference calls as necessary in between meetings. Special meetings can be called at the discretion of the chair.

In January 2002, the Trustees accepted the recommendations of the PBA Task Force on Representation. Candidates for the position of Trustee are required to disclose any affiliation of their law firm or themselves, with any organization or entity, including insurance carriers, which have dealings with the Insurance/Trust. Trustees are asked annually about such affiliations. The number of Trustees who are so affiliated should not exceed 1/3 of the number of Trustees.

While the Trustees are appointed by the Board of Governors and the Trust is a PBA related entity, its 501(c )(3) designation imposes a separate fiduciary responsibility requiring it to act independently. The PBA Board of Governors reviews and endorses or rejects grant requests submitted by PBA entities to the Trust or Insurance Fund and forwards its recommendation to the Grants Committee. If the Board rejects a PBA entity’s grant request, the Trustees will not consider it. Requests from other entities being brought before the Insurance Fund are also brought before the PBA Board for its input; however, the Trustees, in their sole discretion, make the final determination whether to grant a request and which fund is the proper source.