AMERIND Risk’s Tribal Protection Includes Auto Insurance and Cyber Liability

AMERIND Risk is based on the Santa Ana Pueblo in New Mexico, not far from Albuquerque. The building displays the firm’s motto, “Tribes Protecting Tribes.” (Courtesy AMERIND Risk)

This article originally appeared in the March 2019 “Infrastructure” print edition of Native Business Magazine.

AMERIND Risk, the only Tribally-owned insurance provider serving Indian Country, has been expanding its protection of Tribes, their businesses and their employees with new product lines.

AMERIND Risk launched its latest programs, Tribal commercial auto coverage and cyber liability insurance, in May of 2018.

These expansions add to the reach of the insurer, which was started more than three decades ago in response to a crisis in housing insurance. The company, now based on the Santa Ana Pueblo in New Mexico, employs about 50 people.

AMERIND Risk was begun in 1986 in the housing arena when commercial property insurance for homes on reservations became prohibitively expensive, according to Chief Executive Derek Valdo (Acoma Pueblo). AMERIND was started through efforts by the National American Indian Housing Council and the federal Department of Housing and Urban Development (HUD) to get Tribes to band together to self-insure.

READ MORE: AMERIND Risk: Native Led (by CEO Derek Valdo) and Native Owned

Valdo tells Native Business Magazine that hundreds of Tribes responded to start AMERIND after the cost of insuring HUD’s Tribal housing portfolio jumped from $5 million for three years to $15 million for one year. AMERIND now has 430 Tribal members that make up the backbone of its philosophy, “Tribes Protecting Tribes.”

“No other insurance entity wanted to work with residential property coverage in Indian Country,” Valdo says. About 70-80 percent of Indian Country was rated a “10” for risk by the insurance industry, and 10 is the worst rating. Insurers were interested in Tribal gaming operations, but not housing, he says.

Tribes in Forefront on Housing Safety

Now, AMERIND protects 60,000 units of housing. And Valdo, who took over as CEO in 2012, says the insurance industry has been proved wrong on that assessment of high risk over the years. “I do believe Tribes are in the forefront of building sustainable homes, homes that are more fire-resistant.”

He continues, “It’s actually performed much better than all the modeling. Everyone thought we’d be bankrupt in five, six, seven years. Thirty-two years later, AMERIND is still standing strong.”

In 2004, AMERIND became a Section 17 corporation under the Indian Reorganization Act to get Tribal tax advantages and access to Tribal sovereign immunity.

“It gave us a tremendous opportunity to expand our reach,” Valdo says. “When a Tribe does business with AMERIND it’s doing business with an entity that has similar attributes of a Tribe. We’re considered an arm of the Tribe.”

That’s because AMERIND Risk was sponsored by three Tribes: the Red Lake Band of Chippewa, the Confederated Salish and Kootenai Tribes of Montana, and the Pueblo of Santa Ana.

“What section 17 gave us was sovereign immunity as well as the tax advantages of a Tribe. When they (Tribes) contract with AMERIND to provide insurance, we recognize that sovereignty,” Valdo says.

A key factor in this change of organization was being able to use the Tribal courts, Valdo says. “From the claims perspective, we help Tribes keep third-party claims in their Tribal jurisdiction, in their Tribal courts.”

AMERIND Risk now protects $14 billion of property. Its premiums have climbed from $6 million the first year to $57 million currently, according to Valdo. “We have a lot of Tribes,” he says. “When you control volume, you can dictate a better price.”

Its product lines have expanded from housing (it still handles coverage of the Indian Housing Block Grant units it started with) to Tribal governments and businesses (property and liability), Tribal Auto, Cyber Liability, homeowners’ and renters’ insurance, employee benefits, worker’s compensation and critical infrastructure (broadband), its first non-insurance line. AMERIND also brokers medical, dental and vision coverage.

Cyber liability is now available to all its clients who subscribe to its General Liability package, and comes in amounts from $50,000 to $1 million. It protects Tribes from breaches of security of their information/technology structures.

On auto insurance, AMERIND Risk is partnering with Berkley Risk, a subsidiary of W.R. Berkley Corp., which carries an “A+ (Superior)” A.M. Best rating and “A+ Strong” rating with Standard and Poor’s Corp.

Going forward, AMERIND would like to expand its product offerings to protect Tribal members on near-reservation land and fee simple land (private property) on reservations, Valdo says. And he thinks AMERIND can be helpful in other ways, as well.

“Tribes are beginning to expand beyond hospitality,” he says. “They are going to need a company that knows how to negotiate Tribal law and state law. We want to be there for those Tribes.”

Broadband Now Critical

Critical infrastructure for Tribes now includes broadband Internet technology. That’s why AMERIND Risk has added a broadband component to its more traditional lines of insurance products.

It sees broadband as a critical need for Tribes as so few have it now, and as the technology supports crucial Tribal priorities like public safety, education and health care.

Geoffrey Blackwell, (Muscogee (Creek)) AMERIND Risk’s Chief Strategy Officer and General Counsel, points to a recent General Accountability Office report that concludes a Federal Communications Commission (FCC) study on Tribal broadband access overstated broadband availability in Indian Country.

Blackwell, testifying before Congress last October, said, “Thirty-six percent of residents on Tribal lands lack access to fixed broadband service at the benchmark speed of 25/3, as compared to seven percent nationwide. And the disparity grows even more striking on Tribal lands in rural areas, where 59 percent of residents lack access to what has become the high-speed Internet lifeblood of our 21st century economy.”

AMERIND Risk’s ACI unit is the firm’s first non-insurance line. ACI is involved in all facets of a Tribe’s broadband implementation, Blackwell says, including “planning, development, acquisition, design, implementation, buildout, management and even fiscal agency for projects that bring high-speed Internet to Tribes.”

The majority of projects involve fiber, “the Valhalla of high-speed Internet backbone transmission,” he says.

A fiber project in the desert helps broadband Internet reach another Tribe. At least 10 Tribes have used AMERIND’s Critical Infrastructure unit to get access. (Courtesy AMERIND Risk)

“It was really a commitment to Indian Country,” says Blackwell of the effort to start ACI. AMERIND’s highest priority is “finding sources of financing and working in the trenches with Tribal leaders and project managers to get broadband into Tribal communities. Many of these communities are remote, and but for specific federal funding or matching funding, or creative ways of financing, would not have fiber through their communities.”

ACI has done at least 10 broadband projects to date, with Tribes in New Mexico, Arizona, Alaska and Minnesota. There have been Tribal consortiums, where there have been services off a major fiber route that have gone into multiple Tribes, “including remote Alaska Native villages.”

Blackwell has extensive experience in the field. He is a former Chief of the FCC’s Office of Native Affairs and Policy. Irene Flannery, who also came to AMERIND Risk from the FCC, where she was Deputy Chief of its Office of Native Affairs and Policy, is the director of ACI. She is an expert on FCC’s subsidies, a key broadband financing component for Tribes.

“Indian Country lags far behind the rest of the United States in broadband deployment,” Blackwell notes. Key to an installation is the particular Tribe’s needs.

“The point is to start at the beginning. The beginning is to look at everything the community needs and the community is seeking to obtain. No one size fits all. We’ve said that for years. There really needs to be an analytical approach that takes into account unique needs of Tribes.”

Implementation can take a total of two or three years, Blackwell says. Different communities have different building seasons, for one thing. Terrains can be different. Plus, “In certain places in Indian Country there are cultural resources that must be accounted for and avoided. These projects can be very detail-intensive from one Tribe to another. ACI has been very successful in multiple projects that have involved miles and miles of long-haul fiber,” he says.

“It’s more than just recreation. A lot of it is for essential and very diverse community needs. At the top of the list is public safety, health care, civic engagement, education.

“A lot of the curriculum for our students is going online,” he points out.

Going forward, Blackwell sees the country as poised for a second generation of technology advancement. “Indian Country will be ready the next time there’s major constructions of fiber across the West and North and well, throughout the country really. It won’t get bypassed like it did before.”

Tribal Workers Compensation

Another key product line is workers comp. AMERIND Risk program manager Robert Dahl helped create the company’s Tribal Workers Compensation program in 2004, and for him it is all about Tribal self-determination.

“When Tribes purchase conventional, statutory workers’ compensation policies, they’re not only signing up for a standard, one-size-fits-all model, they’re waiving their sovereign immunity and subjecting themselves to state jurisdiction and courts,” Dahl writes in a trade journal article on aspects of the TWC program.

“Statutory workers’ compensation policies leave Tribes vulnerable to the litigation that runs rampant in state systems.”

Besides being designed to be adjudicated through Tribal courts rather than state ones, TWC can also save Tribes money.

“By appointing seasoned, Tribal lawyers to cases and utilizing an arbitration type format, AMERIND helps tribes avoid lengthy court battles. This more informal process saves Tribes considerable legal expense,” Dahl feels.

“Doing business sovereign to sovereign with AMERIND Risk means saving money by avoiding state and federal taxes and fees. AMERIND’s expense ratio is typically 10-15 percent less than other insurance carriers.”

Another way Tribes can save money is by a Return to Work program, he writes.

“Bringing an employee back to work faster keeps them connected with their employer, lessening the likelihood of them seeking an attorney, which reduces potential litigation costs.”

Dahl describes aspects of the program in a detailed fact sheet.

“Like state workers’ compensation systems, AMERIND’s TWC program covers Medical Expenses, Lost Wages, Death Benefit and Permanent Disability Benefits. Unlike state workers’ compensation systems, however, our TWC program is adaptable to a Tribe’s specific needs. For larger Tribes with an existing workers’ compensation ordinance, AMERIND Risk will underwrite the Tribe’s ordinance and handle the claims pursuant to that ordinance.”

He continues, “AMERIND regularly promotes hazard awareness and prevention, and additionally encourages safety consciousness from leadership down to staff.

“When supervisors reinforce employee attention to safety with positive reinforcement, it not only boosts morale, it keeps claims down.”

Dahl began his career assisting Midwest Tribes in creating self-insured workers comp plans, creating ordinances for the programs and guiding adjudication to Tribal court systems.

He feels this product helps the economic sustainability and growth of Indian Country. “AMERIND Risk’s TWC program keeps money circulating in Indian Country.”

READ MORE: 3 Fundamental Fixes Needed for Tribes to Bridge the Digital Divide