Terps' Smith gets $1 million policy

June 14, 1994|By Don Markus | Don Markus,Sun Staff Writer

University of Maryland basketball star Joe Smith has been approved for a $1 million insurance policy with Lloyd's of London to protect himself financially against a disabling injury, pending the outcome of a physical examination Smith took last week.

Smith's mother, Letha, said Sunday night that the one-year policy was approved "about a week ago." The policy will run through next June, when it can be renewed if he decides to stay in school. Smith also took out a life insurance policy for an undisclosed amount that would be paid in case of accidental death.

The disability policy is payable only if Smith suffers a career-ending injury on or off the court during its 12-month term. It is similar to the one that former Maryland star Walt Williams obtained before his senior year in 1991-92. Williams had missed more than half of his junior year with a broken leg.

The Smiths declined to say how much the policy cost. But, according to Carol Huntley, a Toronto-based underwriter who specializes in disability policies for athletes, Lloyd's of London sets its premiums depending on a person's age and earning capacity. In Smith's case, it was likely to be approximately $7,500. The policy is renewable each year.

Williams secured his policy through the Exceptional Student-Athlete Disability Insurance program adopted by the NCAA four years ago. But Smith and his family sought the advice of a law firm in their hometown of Norfolk, Va. Attorneys at Kaufman and Canoles found a local insurance agent to complete the process. The policy was written by a California-based underwriter, and the loan to pay off the premium -- in Joe Smith's name -- was approved by the Bank of Tidewater in Norfolk.

This disclosure is the latest example of Smith's rise to prominence. The 6-foot-10, 220-pound center, who a year ago was not considered by many to be among the top 30 high school players in the country, came out of nowhere as a freshman. He led the Terrapins to the school's first NCAA tournament appearance in six years and a berth in the round of 16 for the first time since 1984-85.

Smith averaged team highs of 19.4 points, 10.7 rebounds and 3.1 blocked shots and was the Atlantic Coast Conference's Freshman of the Year. He became the fourth freshman in league history to be named first-team all-conference and was also an honorable mention All-America.

Smith said yesterday that he began discussing insurance with assistant coach Art Perry after the season ended. "He said that since I was going to play a lot of pickup ball, there might be guys out to make a name against me and I might get hurt," said Smith.

Mrs. Smith, who works at a U.S. naval hospital in Portsmouth, Va., said that Perry suggested in April that she look into insuring her 18-year-old son. The program monitored by the NCAA is designed to keep unscrupulous agents or overzealous boosters from paying for the steep premiums in hopes of representing athletes in the future. Mrs. Smith called Rand Randolph, a local attorney who is doing some work for her brother.

Randolph and David Delpierre, a partner in the firm, said they called the NCAA and American Specialty Underwriters, a Boston-based firm that writes policies under the ESDI program. They said they were told that it would be unlikely for any freshman -- regardless of his or her earning potential -- to get that type of policy. Delpierre said they contacted ASU more than once. In the interim, they had received a positive response from two Lloyd's of London brokers.

"It seemed like that was the simplest thing to do," said Delpierre.

Mark Idelson, who oversees the ESDI program for American Specialty Underwriters, said that he knows of at least one other talented freshman -- believed to be center Marcus Camby of Massachusetts -- who took out a disability policy through ASU.

According to Michael McNeely, director of operations for the NCAA, the program is available to "about 50" college athletes a year regardless of their academic class. The decision by the Smiths to seek legal counsel is of concern to Perry.

"I had reservations," said Perry, who handled the procedure for Williams three years ago. "I told Joe's mom that it was easily done through the NCAA. I told [Letha Smith] that it was her decision. My concern is this: Why pay for something that you can have done for free? What's your obligation [down the road]?"

Delpierre said that he had adhered to NCAA guidelines regarding his firm's representing the Smith family. He said that the family will be billed for his services, and while it was not taken on as a pro-bono case, the Smiths were not charged a full fee.

"We did not seek out Joe Smith or his family," said Delpierre, who added that his firm has given legal advice to other athletes but has never formally represented them. "We've kept our road very narrow."

Said Joe Smith: "At first, I was very concerned. I kept thinking, 'Do they want to be my agent later on?' Now that I've met with them, and knowing they've helped my uncle out, I think they're OK. Hopefully, it'll be my choice when the time comes."

Mrs. Smith, who said last fall that she hoped her son would remain at Maryland for four years, apparently has rethought her initial position. Though she still would like to see him complete his eligibility, she said, "We're taking it one year at a time."

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