Agent, Gambling and Amateurism Activities Staff

Agent, Gambling and Amateurism Activities Staff

Rachel Newman BakerDirector of [email protected]

Angie CretorsAssociate Director of AGA [email protected]

Marcus WilsonAssistant Director of [email protected]

Chance MillerAssistant Director of [email protected]

Exceptional Student-Athlete

Disability Insurance

Overview and Amateurism Concerns

Generally

• Disability insurance provides an exceptional student-athlete with the opportunity to protect against future loss of earnings as a professional athlete, due to a disabling injury or sickness that may occur during the collegiate career.

• Coverage is generally available to top draft prospects in the sports of football, men's and women's basketball, baseball, and men's ice hockey.

Trends/AGA Concerns

• Agent recruiting tool.• Financial advisors and third parties securing the loan to pay for insurance policy.

• Deferred payment for insurance policy.

Legislative Authority and NCAA Bylaw 12.1.2.4.3 Revisions (effective January 16, 2010)

An individual may borrow against his or her future earnings potential from an established, accredited commercial lending institution exclusively for the purpose of purchasing insurance (with no cash surrender value) against a disabling injury or illness that would prevent the individual from pursuing a chosen career, provided a third party (including a representative of an institution's athletics interests) is not involved in arrangements for securing the loan.

NCAA Bylaw 12.1.2.4.3 (continued)

However, an institution's president or chancellor (or his or her designated representative from outside the department of athletics) may designate an institutional staff member (or staff members) (e.g., professional sports counseling panel) to assist a student-athlete with arrangements for securing the loan and insurance. 

NCAA Bylaw 12.1.2.4.3 (continued)

The institution shall retain copies of all documents related to loan transactions and insurance policies, regardless of whether the institution is involved in the arrangements.

Scenario

During the summer session and prior to his initial full-time enrollment at an NCAA institution, Brandon, a football student-athlete, failed to inform his NCAA institution that he had obtained a disability insurance policy, and the institution failed to obtain appropriate records of such policy.

Brandon obtained an unsecured loan in order to execute the insurance policy on a deferred-payment basis and based primarily upon his future earnings as a potential professional athlete.

Scenario (continued)

Brandon obtained the loan from a financial advisor, who informed him that it was permissible under NCAA legislation to execute the insurance policy.

Question

Are the actions of the financial advisor in assisting Brandon with securing a loan for disability insurance permissible pursuant to NCAA legislation?

Answer

No. It is a violation for the financial advisor to have assisted Brandon in obtaining an unsecured loan in order to execute the insurance policy on a deferred-payment basis and based primarily on Brandon's future earnings as a potential prospective professional athlete.

Answer (continued)

Additionally, Brandon failed to notify his NCAA institution about the loan and insurance policy and the institution was unable to verify that the loan had been executed through an established, accredited commercial lending source prior to the policy being issued to Brandon.

Applying for Coverage

NCAA Exceptional Student-Athlete Disability Insurance (ESDI) Program

Date

1. Application Process.

2. Who is eligible for coverage?

3. Coverage Benefits.

Date

UNDERWRITING QUESTIONNAIRE EXCEPTIONAL STUDENT ATHLETE DISABILITY PROGRAM

Permanent Total Disability/ Accidental Death Coverage

Please check one: Football Men’s Basketball Men’s Baseball Men’s Ice Hockey Women’s Basketball Position: PLEASE COMPLETE IN FULL: 1. Name: 2. School: 3. Current address/telephone:

4. Parent’s address/telephone: 5. Birth date: 6. Height: FT: IN. 7. Weight:

8. Current status (athletics eligibility): FR. SO. JR. SR. 9. Potential Draft Class (year):

10. School contact person/telephone:

11. Total number of intercollegiate games during last regular playing season:

Played: Missed: Please list reasons:

12. Please list details of any injuries, sicknesses or surgeries in last three (3) years:

13. Please provide details of any other disability insurance coverage in effect:

14. List academic and athletic honors received during college career: 15. Designated beneficiary (death benefit):

The undersigned declares that to the best of his or her knowledge and belief the statements set forth herein are true. Although the signing of this questionnaire does not bind the undersigned to effect insurance, the undersigned agrees that this questionnaire and its attachments shall be the basis of the contract should a certificate be issued. The Company is hereby authorized to make any investigation and inquiry in connection with this questionnaire that it deems necessary. Any person who knowingly provides false, incomplete or misleading information or conceals information, for the purpose of misleading or defrauding, concerning any fact material thereto, commits a fraudulent act, which is a crime. Penalties may include imprisonment, fines or denial of insurance coverage and benefits.

SIGNATURE SIGNATURE Student-Athlete Date Director of Athletics Date Complete and send to: HCC Specialty Underwriters, Inc.

Exceptional Student-Athlete Disability Insurance Program 401 Edgewater Place, Suite 400 Wakefield, Massachusetts 01880

800/927-6306 Fax: 781/994-6001

NCAA 17293-6/05

Who is Eligible for Coverage

Date

• Baseball – Projected future first & second round picks.

• Basketball – Projected future first round picks (NBA & WNBA)

• Football – Projected future top three round picks.• Men's Hockey – Projected future top three round

picks.

ESDI Program - OverviewAVAILABLE COVERAGE:

• The Exceptional Student-Athlete Disability Program offers a permanent total disability (PTD) policy. A 24-month maximum policy term is available for any underclassman eligible for the program. The policy provides 24-hour accident and sickness coverage, which includes playing and practicing in the student-athlete's respective sport.

PERMANENT TOTAL DISABILITY (PTD) FORM:

• The PTD policy would provide a lump sum payment after the elimination period has expired. The elimination period for the PTD option is twelve consecutive months from the date total disability has been determined. To be eligible for benefits, it must be medically determined, at the end of the elimination period and before the benefit is paid, that the insured student-athlete will never be able to participate in his or her sporting activity, at the professional level.

ELIMINATION PERIOD:

• An elimination period is an interval of time during which no benefits are payable to the insured student-athlete in order to determine the nature of the disability. The elimination period commences from the date the injury or sickness resulted in total disability.

Date

Coverage Benefits

Date

• Permanent Total Disability (Injury or Illness)

• Accidental Death Benefit

• A+ rated, Domestic Insurance Carrier

• Guaranteed Premium Financing

Financing the Coverage and Repayment

Financing Provided by US Bank Professional Sports Group• Student-athletes approved for this program are automatically eligible for a

loan, if necessary.

• The student-athlete is obligated to repay the loan in full when any of the following occurs: (1) the student-athlete signs a professional contract, (2) the disability benefits become available due to a covered injury or sickness or (3) the coverage is no longer in effect and the loan note matures.

• Disability Insurance loan is in the student athlete's name.

• Loans are structured as single pay notes with principal and interest due at maturity. Payments may be made at anytime and there is not a prepayment penalty. Maturity date is based on the student-athlete's sport.

• Underclassman who have disability insurance loans will most likely renew their insurance if they return to school for another year. If the student-athlete needs financing for the renewed insurance we will apply the current loan amount (principal and interest) to the new financed premium in order to consolidate the loans.

Date

Financing Provided by US Bank Professional Sports Group

Date

• Failure to repay the loan will be reported on student-athlete's credit score.

• Defaulted loans will be turned over to a collections agency to pursue up to and including litigation. Collections costs will be added to the outstanding balance.

• In rare circumstances the loan can be refinanced to extend the payment date.

• Interest Rate: PRIME + 1.50%

• Origination Fee: $150

• *US Bank does have the capability to provide disability insurance financing above the NCAA program's limits. This is subject to credit approval.

NCAA Loan Maturity Dates & Maximum Insurance Coverage- 2011 Draft

Date

FOOTBALL BASKETBALL HOCKEY

November 2, 2011 March 2, 2012 January 2, 2012

$5 Million $5 Million $1.2 Million

BASEBALL W BASKETBALL

October 2, 2011 September 2, 2011

$1.5 Million $250,000

Alternatives to the NCAA Program

What are the Options?

Date

• It is permissible to get coverage outside of the NCAA program.

• NCAA has a list of other providers if needed- NCAA does not recommend or endorse any other program.

• The NCAA loan program is only available with NCAA insurance program.

• Premium does not have to be financed.

Questions to Ask When Purchasing Disability Insurance

1. What is the term of the policy? Is there a return of premium provision in the event of cancellation or early signing?

2. Are you covered 24 hours per day for injuries and illnesses?

3. What is excluded from coverage under the policy?

4. Does the policy include a death benefit?

5. Does the policy pay benefits in installments or one lump sump?

6. What carrier is underwriting the policy? What is their financial rating? Are they domestic or foreign?

Date

Who Can I Call?

Date

•NCAAJuanita Sheely- Associate Director 317/917-6425 or [email protected] Montgomery- Coordinator 317/917-6429 or [email protected]

•US Bank Josh Thamm- Private Banking Specialist 615/254-5988 or [email protected] Schuckman- Manager 513/632-4125 or [email protected]

•HCC Specialty Jeff Stanley- Senior Sports Underwriter 800/927-6306 or [email protected] Fiore- Assistant Sports Underwriter 800/927-6306 or [email protected]

QUESTIONS?