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In Defense of Small Fraternals

Membership renewal notices and dues billings were sent to all NFCA members in early December, and today we are on the threshold of something truly remarkable: a 100% renewal rate.

That's an accomplishment that's rare in any business, as all of you know well.  For a trade association executive like me, it's absolutely heartwarming because it means that the organization is providing advocacy and information services that offer real value to your society.

It also makes all of us here at NFCA aware that, in order to keep you as a member next year, we'll have to exceed your expectations over the next 12 months.  And with your help, some hard work, and just a little luck, we'll be able to accomplish that for all NFCA members, large and small.

Over the past week or so, I've received some rather pointed criticism from inside and outside the NFCA ranks.  While it's certainly not fun to be booed, it's part of being a leader of an organization that knows it needs to change if what we all hold so dear – the preservation and enhancement of the fraternal concept – is going to survive in the 21st Century.

The primary focus of the critiques is that the association is taking actions that are detrimental to small societies.  NFCA's support of state laws requiring fraternals to meet RBC standards and our efforts to limit access to the association's RBC worksheet exclusively to NFCA members were thought to be example of such actions.

I understand the concern over these issues and I appreciate that concern being brought to my attention.  When it comes to RBC standards, we are operating in a different environment than we were just a few years ago.  Regulators want to use the same effective tools that they employ to determine the solvency of commercial insurers for fraternal insurers.  They know that our fraternal mission differentiates us from the commercial carriers, but that does not mean that we will be held to a lesser financial responsibility standard than others who collect premiums and promise to pay claims.

Our credibility in the market – with agents and prospective members – is based on our financial strength.  State RBC laws can help provide that credibility and enhance our collective strength. 

We have received criticism for charging non-members for access to a helpful financial filing tool instead of providing it complimentary.  Members' dues dollars fund the development of the NFCA's electronic “NAIC Fraternal Benefit Societies Risk Based Capital Report,” and we believe members should be the ones that benefit from it.  Non-member societies can purchase the worksheet for a reasonable fee – or they can simply join the association (often for a lesser charge) and get access to all NFCA products and services.  What's unfair about that?

I've made no secret about my view that for many societies, consolidation may be the best way to preserve their heritage and protect their members.  But that is not a blanket endorsement of "bigger is better" or worse yet, bigger is the only way to survive.

If you look at everything we've done over the past 18 months – including a new and improved Agents and Executive Liability Insurance Program, the discount lab services program, an array of cost-effective Webinars, holding the line on the cost of dues and meeting registration, and the incredible potential cost saving and product offerings included in the Fraternal Cooperative initiative – it's all been done with the idea of helping small fraternals compete more effectively and efficiently.  I think our track record on this is clear and unequivocal – NFCA is THE advocate for the fraternal system, and that includes small, medium and large societies.

Maybe the best evidence of the association's commitment to small societies – and your inherent understanding that what we do, we do for the entire fraternal system – is the fact that every member society renewed its membership, and for that I thank you.  I would also sincerely appreciate hearing your observations on why you – or others –  may believe the NFCA works harder for larger societies and how we can improve that perception.

  • What new programs do you feel benefit larger societies in favor of smaller ones?
  • Do workshops and sessions at Section Mid-Year Meetings and the Annual Meeting cover topics that only benefit the larger fraternals?
  • Do you feel smaller societies pay more than their share of membership dues?
  • Do you think the attention the staff pays to employees of larger societies impedes our ability to service the leaders from the smaller ones?

I welcome your suggestions as to how NFCA can better serve you.

3 Responses

  1. I will admit that I have not been at the ;ast couple of annual meetings nor the last two fraternal section meetings, so my comments may be out of date. The perception that the big guys get more attention from NFCA has always been there. Many of the workshop topics were/are geared towrard them. It does small fraternals litle good to have a presenter tell us how Thrivent handles a given situation. That was the trend for years. Hpefully, it has changed.
    Realistically, mergers may be the answer for many small fraternals, but they do not need to feel pushed towrd that end. Support for their existence from NFCA is imperative.
    The ultimate end of the merger business would be one gigantic fraternal society. Then NFCA would serve no function. The number of member societies has dropped for various reasons. Look to solving the problems and preserving the membership of all societies.

  2. As a small fraternal society, Degree of Honor decided to get involved in the discussions with regulators regarding the use of RBC Standards over the past year, so we had all of the information we needed. I can express “informed support” of this approach for the sake of our industry….societies both large and small.

  3. I thought this last posting might get some attention. Thanks for your comments, folks. I agree that a healthy fraternal system is composed of all types and sizes of societies. I also think that there is a lot we can learn from one another – large and small. Some of the best places for that education to take place are the Section and Annual Meetings. Take a look at the agendas for these and I think you’ll find there’s something for everyone to take home and put to use in their organizations. Keep the conversation going…

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