MONTPELIER, Vt. -
Starting Oct. 1, VSECU won't be paying insurance benefit premiums for share account holders. VSECU CEO Steven Post said the program agreement had always stated that it would stay in effect at the pleasure of the board of directors.
"They've become accustomed to it for 40 to 50 years. It's not achieving its original purpose any longer so we decided to discontinue it," Post said.
Post described the insurance premium program as being a feature of the member's primary share account. Many years ago, Post said VSECU had created the program to encourage members to save for the long term. Nearly a half century ago, a savings account was the only way to save at nearly all credit unions, he said. Today, credit unions routinely offer certificates of deposit, money market accounts in addition to customized savings programs.
Post has been CEO of VSECU for 18 years overseeing 42,000 members and 30 SEGs with $370 million in assets. VSECU had been paying $200,000 per year on $30 million in insurance policies. Around 6,000 VSECU members had their premiums paid by the credit union.
Post said he and the board of directors were well aware that some members would be unhappy with the end of the paid premium program, but no one saw a protest or negative press clippings in the offing. Around 15 people-many of them not even VSECU members, according to the CU-picketed the credit union with some holding signs. Some of the protesters were members of the Vermont State Employees Association, a workers' union.
"That was certainly not anticipated," Post said.
Post said he walked out to the protesters and approached a man holding a sign that stated "KEEP YOUR PROMISE VSECU" and asked him if he knew what the credit unions "promise" to its members was. The man said he didn't know so Post asked if he knew anything about the insurance being offered or withdrawn. Again the man said he didn't know and Post learned the man was a member of the state employee's union.
"That came across as pretty shallow to me," he said. "There is no promise being broken."
The newspaper story didn't help either. The Times Argus in Montpelier ran a story with the first sentence reading: "Die soon or get new life insurance." Elderly VSECU members are now claiming age discrimination, a charge the Vermont State Employees Association is also making. The newspaper's website feedback section had several highly negative comments with one person writing that VSECU had become no better than a bank and another stating it was worse.
Post said that during planning, VSECU staff and the board of directors considered continuing paying the premiums for only very senior members, an idea that was promptly quashed by the CU's CUNA Mutual representative, who said it would be discriminating by age. Post said VSECU members can still get insurance they need with the array of products and services offered at the credit union.
"They can get the insurance. CUNA Mutual will issue a replacement policy if they want to pay the premium. As you can imagine, the cost of insuring a 92 year old is quite high," he said.
Post said VSECU has adopted a wait-and-see position after last week's protest. Calls to CUNA Mutual, the Times Argus and the Vermont State Employees Association weren't returned by press time.
