Associated Press

March 17, 1994

Religion in the News


Servants of God sexually abuse youth and a Roman Catholic archdiocese faces bankruptcy because of clergy abuse suits. A treatment center for pedophiles is closed, and other churches try in vain to insure against clergy abuse.

Acts of retribution from God? No, insurance companies.

As clergy sex abuse cases unfold and court judgments pile up into the hundreds of millions of dollars, insurers have become important arbiters of issues including compensation for victims and how sex offenders will be treated.

Some religious and mental health officials are concerned that as insurers take an increasingly hard-line approach to settling lawsuits or renewing liability coverage, abusive clergy seeking help and their victims will be forsaken.

Cost estimates for the priest sex-abuse scandals in the United States reach as high as half a billion dollars. And that is only in the Catholic Church -- experts say the scandal cuts across denominational lines.

The exact figures are unknown because churches and insurance companies are reluctant to reveal settlements.

What is clear is that insurance companies are being asked "to pay the lion's share," said Jeffrey Anderson, a Minneapolis attorney for abuse victims.

But many insurance companies are balking at paying, and some have responded with lawsuits of their own against churches they say should have known better than to hire priests who had a history as sexual abusers.

In Santa Fe, Archbishop Michael Sheehan is asking parishes for cash to avoid bankruptcy court as it grapples with scores of sex-abuse lawsuits that could cost up to $50 million.

Church officials praised archdiocesan insurers, Lloyds of London and Interstate Fire and Casualty, for helping pay for 16 settlements of alleged victims of former priest Jason Sigler.

But archdiocesan officials said insurance companies have refused to pay in other cases.

Lloyd's spokesman in New York City, Norman Weissman, declined an interview because it was against "Lloyds' underwriters policy to discuss cases."

Several insurance companies have sued the Archdiocese of Santa Fe in federal court, alleging negligence in overseeing the assignments of known pedophile priests. The archdiocese countersued insurers in state district court, alleging the companies failed to uphold their contracts with the archdiocese.

In Wisconsin, the Barnabas Center closed last May because church insurance plans would no longer pay for inpatient care for clergy, said Hands, who co-founded the sexual disorder facility in 1988.

Treatment can become expensive because in-patient programs cost from $250 to $800 per day, and can last up to eighteen months. Most insurance companies cringe at the amount, and churches, dried up from settlement payments, cannot make the payments, Hands said.

For local churches of all denominations, the bottom line is often rising insurance costs and limited or no coverage for clergy sexual abuse.

Clarence Dziak, president of Great American Insurance Co. in Albuquerque, N.M., said that the payment crisis in New Mexico has made it difficult for all churches to buy insurance, and pastoral liability coverage will not be offered.

Paul Ogden, insurance risk manager for the Presbyterian Church (U.S.A.), said the Presbyterian churches may get coverage, but every underwriter had an exclusionary provision for child molestation and pastoral liability.

Ogden added that "insurance companies are running scared," and policies have become costly.

Even expensive policies do not ensure payment.

The Servants of the Paraclete, a treatment center in Jemez Springs, N.M., agreed to a $5.6 million settlement for victims of former priest James Porter in Minnesota and to a $2 million settlement for his victims in New Mexico. The Servants of the Paraclete said it was assigning them its rights against insurance carriers, and that the settlements would be collected from the insurers, not from the treatment center.

But the treatment center is still in court seeking reimbursement from its three chief insurers, Catholic Mutual Relief Society of America, Great American Insurance Company and St. Paul Fire and Marine Insurance Co. for alleged breach of contract.

Other treatment centers fear they also will be held accountable if treatment doesn't work.

Gerald Kaplan, Director of Alpha Human Services in Minneapolis, said the possibility of recidivism cannot be eliminated.