Preferra Insurance Company RRG Announces Lawsuit Against National Association of Social Workers (NASW) Alleging NASW Misled Members, Misused Member Data & Undermined Insurance Programs

Preferra Insurance Company RRG upholds commitment to serving its policyholders in the social work community by holding NASW and its subsidiaries accountable

FREDERICK, Md., Sept. 20, 2024 /PRNewswire/ -- Preferra Insurance Company RRG today filed a lawsuit against the National Association of Social Workers (NASW) and affiliated entities over their refusal to uphold their obligations to Preferra, which exists to protect social workers. The lawsuit, filed in the U.S. District Court for the District of Columbia, also names NASW's wholly owned subsidiaries NASW Assurance Services Inc. (ASI), and NASW Insurance Company Inc. (NASWIC).

"Preferra's first obligation is to the social workers and other behavioral health professionals we protect with professional, general and cyber liability insurance," said Preferra Board President Dr. Richard Jones. "We made every effort to resolve this issue amicably and avoid legal action, but it has unfortunately become clear that NASW and its affiliated entities will not act in policyholders' best interest unless forced to do so in a court of law. We are deeply concerned by NASW's refusal to fulfill its obligations to the social workers who rely on it for support, and by the steps NASW has taken to undermine protections for social workers that are provided through Preferra policies."

The legal complaint filed by Preferra outlines numerous ways NASW has, through the control of its affiliates ASI and NASWIC, harmed social workers, including by refusing to pay insurance claims NASWIC is contractually obligated to pay, and attempting to funnel more profits to NASW while blocking Preferra's efforts to pay dividends to its policyholders. The lawsuit also details how ASI has misused Preferra policyholder information, attempting to insert itself into the relationship between Preferra and its policyholders and interfere with the policyholder application, renewal and claims processes.

This lawsuit was initiated with Preferra's policyholders' best interest in mind and all policyholders will continue to receive the same high-quality coverage and service throughout the litigation process. Preferra has taken steps to separate itself from NASW and its affiliates and ensure it remains in a strong financial position with sufficient capital to pay all claims for its insureds. These steps include replacing NASWIC as Preferra's reinsurer with Lloyd's, one of the world's leading reinsurance companies.

"NASW's actions are causing confusion among social workers who rely on Preferra for peace of mind with their insurance coverage," said Jones. "We never expected one of the biggest threats to our policyholders to be the association that claims to represent them, but we're committed to fighting for social workers and standing up for our policyholders no matter what."

The lawsuit includes multiple breaches of contract by ASI that inflicted harm to Preferra and its employees. The lawsuit also asks the court to require NASWIC to pay outstanding claims on social work policies in which they were the reinsurer and received premiums over the years to provide reinsurance coverage. NASWIC owes these outstanding claims amounts to Preferra and its policyholders who deserve to be made whole as insureds and owners of the company.

About Preferra Insurance Company RRG
Since 2012, Preferra Insurance Company Risk Retention group has been the trusted choice in providing best-in-class liability insurance products to social workers, mental health professionals and behavioral health specialists. It is an independent organization overseen by social worker leaders and insurance experts, and is owned by policyholders. Preferra provides professional liability insurance protection to over 100,000 social workers and behavioral health professionals, and offers risk management courses on current and relevant issues across the profession. 

SOURCE Preferra Insurance Company RRG