CAMICO at 20: out of a crisis--a member-driven success story.

• Author: Dodsworth, John
• Position: 20THANNIVERSARY - Company overview

In retrospect, the cancellation notice the Imperial Casualty Insurance Company bestowed on CalCPA in fall 1986 was CAMICO's birth certificate.

The notice ignited a chain of events that lasted about nine months and led to the creation of California Accountants Mutual Insurance Company, now known as CAMICO.

As CalCPA's director of business operations at the time, I can recall the galvanizing effect of that simple document, which notified CalCPA's insurance committee leaders that CalCPA members soon would be without professional liability coverage.

Almost overnight, more than 1,700 accounting firms were threatened with exposure to the risk of lawsuits from clients and third parties that relied on their expertise, advice and reports. It was the kind of news that you can't quite comprehend when you first receive it.

CAMICO Chair Lou Barbich, CPA, who was CalCPA president in 1986, immediately assembled a team to evaluate the problem and develop a solution. He was joined by other CalCPA leaders, including Ken Ashcraft, CPA, who later joined CAMICO's original board of directors; Jim Kurtz, then CalCPA executive director; and myself.

A feasibility study confirmed the insurance industry's low appetite for losses and a rapid retraction from writing professional liability policies.

The odds of finding another carrier to provide group coverage at reasonable rates was a long shot.

With time running out and no prospects for replacement coverage, CalCPA leaders realized they had to do something.

The story of CAMICO's birth and rise to the top of a business insurance category shows the good that can happen when crisis meets opportunity.

ENTREPRENEURIAL, PRACTICAL

After it became clear that reasonably priced replacement coverage wasn't available, CalCPA decided on a bold course: form a company that would underwrite and provide liability insurance and risk management services to CPAs in California. The company would be owned and operated by CPAs.

The idea was entrepreneurial and practical: to pool funds and CPA intellectual capital with the goal of partnering with policyholders in a risk management program that would enable CPAs to learn from one another.

An informal board made up of CalCPA leaders and staff was created, which fanned out across the state to secure commitments from California accountants to fund the company's launch.

Whether it was the persuasiveness of our pitch or the dire nature of the times that attracted policyholders to CAMICO...