Arkansas Schools Begin Year in New Insurance System

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LITTLE ROCK – Beginning with the 2025-2026 school year, superintendents and school boards will learn to adjust to a new system of property and casualty insurance.

It’s called SCIP for short. That stands for the State Captive Insurance Program that was created by legislation enacted earlier this year in Act 779 to create a new Office of Property Risk, which will manage insurance for schools, institutions of higher education and state-owned property.

Legislative sponsors, school administrators and officials at the state Insurance Department spent a long time writing the bill, and since its passage they have worked long days transitioning to the new system.

Severe weather events and damage they cause were the driving force behind Act 779, and its companion measure, Act 560. Dramatic increases in the cost of insurance was the reason that in 2023 the state distributed almost $11 million to help school districts pay premiums. Many schools did not have viable options in the private insurance marketplace.

A consultant for the legislature reported that insurance programs for Arkansas school districts had seen their premiums triple in cost between 2021 and 2024.

In short, the property insurance programs for public schools, state-supported institutions of higher education, and state-owned properties “are in a state of crisis.”

The legislature approved Act 779 to provide a long-term solution to ensure the stability of property insurance programs. The effect of natural disasters on the insurance marketplace resulted in the need for legislators to restructure and unify the insurance programs that previously covered schools, colleges, universities and state agencies.

For the current school year the deductible will be $25,000 per occurrence, except if the school district has a total insured value of more than $100 million. In that case the deductible is $50,000.

The director of the new Office of Property Risk told legislators that his staff would continue working in the coming months to achieve the right balance between deductibles and premium prices. “If you want a lower deductible, you are going to have a higher premium,” he said.

Evaluations are continuing, so schools may see changes in minimum deductibles being phased in over the next couple of years.

Many properties owned by institutions of higher education have traditionally been undervalued and need to be reappraised by independent adjusters. From last year to this year the deductible for athletic facilities at the University of Arkansas at Fayetteville is increasing from $250,000 to $1 million per occurrence. If a single natural disaster damages the football, basketball and baseball stadiums, the university would have to pay only one deductible.

Earlier in August the Legislative Council approved the addition of seven new positions for the new Office of Property Risk. The new office is within the larger Department of Shared Services. The new employees will have salaries ranging from $58,000 to $87,000 a year.

The new SCIP insurance program concluded that the replacement value for Razorback Stadium Bud Walton Arena, Baum Stadium and a long list of other athletic facilities on campus would be $1.37 billion.

03 Sep 2025 Weekly Updates