RyeSAC may be sued over broken insurance contract

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By John Gemmell

RyeSAC has been threatened with legal action after breaking a contract with the broker that provided student health and dental coverage.

“RyeSAC cannot terminate its contract with Gallivan and Associates on August 31 or anytime after until the matter is determined by the court,” reads a fax received by RyeSAC president Cooney from Gallivan’s lawyers on August 29.

Two years ago, then RyeSAC president Corey Wright signed a four-year contract with Gallivan and Associates to negotiate health and dental insurance coverage for all full-time and graduate students.

This summer RyeSAC found they could get a better deal from another broker, so they decided to break the contract with Gallivan which still had two years left on it.

“We took a look at our current plan and decided it wasn’t the best deal for students,” said Cooney. “Secretly we had a good discussion about [changing brokers], and took it to our executive committee.”

By switching to the non-profit National Student Health Network, RyeSAC was able to save $17 per student on the cost of insurance. Because RyeSAC are charging a levy based on their old insurance plan, the lower rate means they will run a surplus of about $95,000.

Cooney said he doesn’t expect a lawsuit “by any stretch of the imagination”.

“Student associations from across Canada will be watching this very closely,” he said. “Gallivan and Associates work with student associations across Canada, and I think it is key that they maintain good relationships [with them].”

RyeSAC general manager Brad Lavigne said that if both parties were agreeable to ending the contract, there should be no legal problems. However the letter sent to Cooney called RyeSAC’s actions “a clear and unequivocal breach of contract.”

“Gallivan and Associates is utterly unable to tolerate these unlawful actions on your part and the part of RyeSAC,” it stated.

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