Marsh Unit Arranges Collateral Program for N.C. Workers’ Comp Fund

MMC Securities Corp., an affiliate of Marsh Inc., has completed a $510 million alternative collateral program on behalf of the North Carolina Self-Insurance Security Association for its security fund.

The North Carolina Self-Insurance Security Association provides workers compensation benefits directly to eligible individuals in the event of a default by any member company that self-insures its workers compensation liabilities in North Carolina. All North Carolina employers with more than three employees are required to procure workers compensation insurance either through the commercial market or through self-insurance.

MMC Securities Corp. created the program, known as the Association Aggregate Security System, to to enable the North Carolina Self-Insurance Security Association to operate more efficiently; to provide an alternative form of collateral (other than letters of credit and surety bonds) for member companies, and to significantly reduce the potential for future assessments.

In 2005, the North Carolina General Assembly enacted legislation to facilitate the development of an efficient risk transfer mechanism for the Self-Insurance Security Association.

“The completion of this transaction protects the benefits of injured workers. At the same time, it contributes to the state’s competitive business environment,” commented Stephen P. Gennett, executive director of the North Carolina Self-Insurance Security Association.

MMC Securities Corp. pioneered this approach in California with the implementation of an alternative security program for the California Self Insurers’ Security Fund on July 1, 2003. This program currently provides collateral totaling $5.5 billion for 355 self-insurers, according to MMC Securities.

Source: MMC Securities Corp.:

Topics Workers' Compensation North Carolina