The May 30, 2002, issue of Time Magazine has an article by Frank Gibney Jr.
which asks the question, "Can the Church Go Broke?" Gibney writes
about the potential billions of dollars in losses from all of the sexual abuse
cases now being filed against the Catholic Church. Some of this is covered by
insurance, some is self-insured, and the Catholic Church's personal assets
must cover the rest.
What the article doesn't talk about is that insurance companies are
increasing their rates for sexual abuse cases to all churches in the United
States. Insurance companies often purchase insurance from reinsurance
companies in order to minimize their risks.
The Lutheran layperson in the pew shouldn't think all of this is just a
Catholic problem. This year all churches in the United States, be they
Catholic, Baptist, Lutheran, etc., will be paying greatly increased rates for
sexual abuse coverage. Lutheran Mutual, Church Mutual, Lutheran Trust and
others are all increasing their rates.
This year it is a double hit. Not only are sexual liability coverages
increased, insurance rates on fire, theft, and property loss are going through
the roof. The losses at the Twin Towers are ultimately being shared through
reinsurance companies by all insurance companies. This means rates will go up
for all churches, homes, and businesses.
For those who saw a picture in Time Magazine of the massive three story
stone mansion, the residence of Bernard Cardinal Law, you may have recognized
it as the location for the movie, "Meet Joe Black."
Yes, it is magnificent, but this writer had the opportunity to eat dinner
at Cardinal Martini's palazzo in Milan while attending the Society for New
Testament Studies in 1990. Cardinal Martini had tables set for 300 of us
outside, under the two-story colonnade on the ground level that surrounds his
cobblestone courtyard. So, don't be too impressed with Cardinal Law's
residence. After we ate, Cardinal Martine arrived in the courtyard in his
Mercedes limousine with his chauffer, escort cars, and motorcycle police.
Yes, the Catholic Church is easily the largest single owner of real estate
in the world. The part of the Catholic Church's holdings and operations that
are insured by commercial carriers is reinsured through companies that
ultimately cover your local congregation.