Posted On: October 10, 2008, 1:19 pm CDT

Posted By: Duke Niedringhaus

Let's sort through some facts over Employers attempt to discredit one of their main competitors, Self Insured Work Comp Groups (SIG's). Of the 2 dozen California carriers that failed, none of these were SIG's. California has tight SIG regulations with 80% actuarial confidence required, strict guidelines for approved Excess coverage and only permit homogeneous SIG's with limitations. Yes NY,TN and KY have had major SIG insolvency issues which were generated from inadequate state regulations and in some cases, fraud by the program manager. IF Employers and other carriers consistently "strategically positioned themselves to offer critical customer services" then the multi billion SIG industry would not exist. For every insolvent SIG there are 50 that have never had an assessment and returned substantial surplus distributions while offering greater control to employers. An insolvent SIG or an insolvent commercial carrier is a major problem for every broker and insured. AIG's issues suggest that perhaps SIG's actually offer the most stable and secure home for Work comp coverage.