Our Company’s History

In the mid 1980’s Rhonda Sciortino was a retail insurance broker with an agency that specialized in insuring residential care facilities and convalescent hospitals. She was also a long-term volunteer and supporter of Hillview Acres Children’s Home.

When the hard market of the mid 80’s hit its peak, the liability insurance rates for the children’s home more than tripled. The then CEO of Hillview Acres, H.H. “Corky” Kindsvater, was stunned. After nearly fifty years of caring for abused children, Hillview was facing closure if they couldn’t provide proof of adequate insurance.

It was then that Corky recalled that Rhonda was in insurance. He contacted Rhonda, and she promised to do what she could. Using her relationship in the agency, she was able to convince an insurance company underwriter to do her a favor and write the policy for $25,000 less than the next best quote. Since it was still higher than the previous year, she helped raise the money to pay the dramatic increase in premium.

The word of the premium savings soon spread, and Rhonda was receiving calls from children’s homes all over California. Not only was she able to save them thousands of dollars in premiums, she refused to charge the average $500 broker fee. At that time, the typical savings for a 6-bed home was between $3-4,000 per year. Unfortunately, Rhonda was also getting calls from her boss. She was reprimanded repeatedly for negotiating lower premiums.

About this time, Rhonda was diagnosed with cancer. While recooperating from surgery, she prayed for guidance about the growing conflict between the employer that she’d spent nearly seven years with (and had planned to retire from) and her sense that she was supposed to be spending her life helping people who are helping hurting children. She made a presentation to her employer proposing that she establish a division of their company focused solely on children’s homes. Not only was she turned down, but her boss literally laughed at her saying that “ . . . non-profits aren’t able to pay their bills. It’s a losing proposition.” So, she gave notice and left to open her own business.

Child Welfare Insurance Services began on May 3, 1989, as a retail insurance agency to serve homes for abused children throughout California.

In 1990 Rhonda partnered with an Insurance Company to create the very first insurance program in the United States to insure only homes for abused children. It was the very first time that an insurance company had desired to insure homes for abused children. Secondly, it was the very first time that an insurance company rated a children’s home by the actual exposure to risk, the number of children, rather than their square footage. A few years later, the insurance company changed its focus and ultimately was purchased by a company that had no interest in child welfare risks.

Although the insurance carrier moved on, the precedent had been set, and the rating basis and loss ratio had been established. Rhonda had proven that insuring homes for abused children was not the high risk that so many in the insurance industry had believed it was. The loss ratio for allegations of abuse or molestation was less than 3%. At the onset, everyone had held their breath, fearing that the losses in this exposure alone were going to destroy the profitability of the program.

With that loss history under her belt, Rhonda was able to convince other insurance carriers to step out in faith and insure some of what she calls “the best people in the world.” By proving that this class of business can be profitable, she created some of her competition, but she believes that the more insurance companies that are willing to protect child welfare organizations, the better it is.

In 1991 Rhonda partnered with California Compensation to form a workers’ compensation group that would allow her to provide a meaningful dividend program to participating children’s homes. Not only were Rhonda’s clients eligible to receive dividends from the insurance company, but they were rewarded by Rhonda’s agency for excellence in professional practice, which was measured by frequency and severity of staff and child injuries. Over the years, participants in the group received more than $1,000,000 in rewards from Rhonda, not counting insurance company dividends.

Rhonda worked with California Association of Children’s Homes members to gather data necessary to appeal to the Workers’ Compensation Insurance Rating Bureau for the right to place the payroll for social workers in a category other than residential child care. It was clear that social workers, while having contact with kids, should not be charged at the same rate as that of child care workers.

Rhonda monitored her client’s losses and learned the top five most frequent causes of injuries to staff, the activities that resulted in the most severe injuries to staff, and the months of the year and times of the day when staff are most likely to be injured. Armed with this knowledge, she worked with the insurance company risk management staff, “Corky” Kindsvater, and other child welfare professionals to create a series of workshops that were facilitated throughout California. The results were amazing!

Frequency AND severity of staff injuries and time off work for injured workers were dramatically reduced. The combined savings of the class code changes and the reductions in injuries was more than $11,000,000 annually for Rhonda’s clients alone, not to mention all the California child welfare organizations that benefited from the class and rate changes. Rhonda knew that all those factors positively influenced relationships of staff and kids, reduced experience modification factors, and lowered base rates, which resulted in more money in program for kids.

On July 1, 1998, the first program with Tudor Insurance Company was introduced, specifically insuring foster family agencies and foster parents.

By 1999 Rhonda knew that to have the broadest possible impact on child welfare organizations throughout the country, she had to sell the retail insurance agency and devote 100% of her time to administering programs.

There were other programs and other insurance companies, but today Child Welfare Insurance Services is still the only insurance organization in the United States founded solely to create and administer programs of insurance and risk management for child caring organizations.

They no longer provide workers’ compensation coverage, but the lessons learned in the 90’s are still as valid today. So, Rhonda shares the information with local brokers and child welfare organizations in the hopes that it will help reduce staff injuries, improve staff/youth relationships, and lower insurance premiums.

CWIS will never again be a retail broker, but they partner with local brokers to provide the circle of protection around child welfare organizations that is necessary when tragedies occur.