My Fraternal Sisters and Brothers,
It is difficult to imagine that it has almost been four years since we assembled in Cleveland, OH, for the 47th Quadrennial National Convention. This span of time has been both favorable and eventful for the Alliance. All that has been accomplished has been done to strengthen the foundations of the Alliance further and bolster the future of the PNA for all its members.
The Polish National Alliance has assets of over $432M. Our surplus is above $22M. When two other accounts are combined with the surplus, we have about $35.3M in total unassigned funds. Thus, we can see the size, strength, and financial well-being of the PNA.
Remember the Great Recession of 2008, and its fallout and effects on the PNA. These circumstances brought the Alliance under the intense scrutiny of the Illinois Department of Insurance. During its thorough examination, the Department looked at just about every aspect and nuance of the PNA. It forced certain changes upon us and started a self-examination and internal introspection of the way we operate as a fraternal organization. Some of the guidelines followed were the increased regulations and compliance programs necessary, and the trend concerning future governance of Fraternal Societies.
Over the last four years, we have seen an excess of income over expenses every year: simply put a profit. This has led to an increase in surplus every year. The NAIC (National Association of Insurance Commissioners) has placed a great deal of emphasis on a particular financial statistic called the Risk-Based Capital Ratio. We have exceeded the recommended required ratio every year. It is quite essential to maintain a value above this required ratio; otherwise, we will be burdened by more stringent regulation and oversight.
Concerning the National Convention itself, the delegates will experience some changes which they may consider game-changing. This may be the first Convention which will not elect the President. The Business Board of Directors will now hire the President. This is a change which is following the recommended Governance trend in the Fraternal Society arena. The theory is that this will lessen the possibility of a candidate chosen out of popularity rather than ability. Please note that presently the Department of Insurance can deny an office to someone they feel is not qualified to run said office, usually meaning the President. The other National Officers (Censor, Vice-Censor, Vice-President, Secretary, and Treasurer) will still be elected by the Convention, as will the Business Board of Directors. The qualifications to run for these National Offices and Directors have been eased so that more individuals can run for these offices. As passed at the last Convention, the Fraternal Directors will be elected by the delegates from their particular Region.
As I stated earlier, the Illinois Department of Insurance, in its examination, decided that Commissioner will receive no salary, only expenses. With this as a background, the by-laws were amended to eliminate the Office of District Commissioner and replace them with the appointed position of District Coordinator, which will permit compensation for the position. Please note that the three-phase amending process for these changes was overwhelmingly approved.
One area that requires a great deal of attention is Membership and Sales. Its importance translates into a variety of fields each of which is vital to the general health of the Alliance. Sales provide members which are necessary to replace those who have passed from the scene, but also to grow the organization. These individuals will also provide the pool from which we can elect people who will provide the Leadership at all levels, from the National down through the Regional, District, and Council. This is one aspect that must not be overlooked. Sales also helps provide the needed revenue to fund all the mechanisms of the PNA both organizational and fraternal. Age and health have taken its toll on the Organizers and Sales Representatives who built this great organization. We have to come up with a plan to replace these great women and men and also expand into a professional sales force. We will survive, but we also want to grow and thrive.
Ladies and Gentlemen, the times are changing. Not that long ago, there were about 200 Fraternal Societies, and now there are less than 60. The NAIC and the Insurance Commissioners are burdening these Societies with more regulations and requiring compliance on more issues. The changes in our own governing structure were done in anticipation of the inevitable trend toward such suggested governance structures formulated by the NAIC. I believe the pro-active changes combined with our increasing financial strength provide a sound basis for our future.
I ask the Councils to send their delegates to convene in Phoenix, AZ on Aug. 25th through Aug. 28th for the 48th Quadrennial National Convention of the Polish National Alliance, where they can in a constructive, fraternal, and amicable way strenuously discuss, debate, and approve programs to ensure that we will be around to promote our heritage and pay the policies of our grandchildren and their grandchildren.
TOGETHER, WE CAN AND WE WILL
Wesley E. Musial