El Paso ISD Awards Insurance Consulting Contract


Editor’s Note:  We have monitored insurance consulting fees charged to policitical subdivisions in Texas for several years and find no rhyme or reason for fee structures. We have seen fees as low as $5,000 for the same work as performed for an awarded fee of $100,000. We do not understand how some consultants make money with the low fees they sometimes charge. A 7,000 life political subdivision, for example, awarded a twelve month insurance consulting contract to a large national consulting firm for $24,500. The consultant agreed to review, assist, monitor all lines of cover. In estimating expenses, we concluded that this firm will not make a profit on a $24,500 fee and will in fact lose money. One would wonder if there other revenue streams in play? Of course, dual compensation in Texas is prohibited.