In 1993 I formed a group of like schools to investigate the setting up of a group like this one, but my group was told that each school member would be responsible for the claims against each and every other member of the group if any one member should fail to meet their responsiblity for a claim. Is that still the case. Also, the insurance commisioner’s office requires that a self insured post a bond in an amount of three times the estimated potetional liability. With this group would each school be required to buy a large bond?
A bond is required for the group not the individual schools. With all self-insured groups there is always the issue with being joint and several liable for each other. If the group has good loss control and proper underwriting this exposure would be at a minimum. The DIR regulations help keep groups at a higher standard too.
Good comments/questions.
RE: Claims fund
Members contribute to a fund (the SIG) which is conservatively invested and tracked by policy year. The SIG pays expenses (claims, administrative, etc.) from these collected funds and retains any surplus from contributions and investments for its members. A member pays into the fund in advance. If a member left the group, they would have paid their expenses in advance. If their payment did not cover the costs of their claims, the group would pay for the expense. On the other hand, if a member leaves the group and has not experienced any claims, their advance payment stays with the group.
RE: Posting of security (Actually, groups are regulated by the Department of Industrial Relations, Office of Self-Insurance Plans)
The group is responsible for the posting of security as new members join the group. When an affiliate member is accepted into the group, the group will post security with the DIR OSIP in the amount of the last three years of member’s incurred losses. The expense of the security (can be posted in many ways including letter of credit, surety bond, posting of cash etc.) is contained in the contribution rate of the group.
All factors considered, members of CAPS-SIG are, on average, saving between 20 – 30% on the workers’ compenstation expense, and are taking control of their exposure through tailored risk (safety and loss) control programs and with the benefit of a contracted third pary claims administrator to properly manage claims.
If you have any additional questions, feel free to contact me.
I am the owner of a chain of after-school education centers in California. Workers Compensation has always been a problem because they rate you with the same rates as a university, even though we have had over 200 employees over 10 years without a claim. Do you know of a self-insurance group that includes private learning centers?
In 1993 I formed a group of like schools to investigate the setting up of a group like this one, but my group was told that each school member would be responsible for the claims against each and every other member of the group if any one member should fail to meet their responsiblity for a claim. Is that still the case. Also, the insurance commisioner’s office requires that a self insured post a bond in an amount of three times the estimated potetional liability. With this group would each school be required to buy a large bond?
A bond is required for the group not the individual schools. With all self-insured groups there is always the issue with being joint and several liable for each other. If the group has good loss control and proper underwriting this exposure would be at a minimum. The DIR regulations help keep groups at a higher standard too.
J. Bradley-
Good comments/questions.
RE: Claims fund
Members contribute to a fund (the SIG) which is conservatively invested and tracked by policy year. The SIG pays expenses (claims, administrative, etc.) from these collected funds and retains any surplus from contributions and investments for its members. A member pays into the fund in advance. If a member left the group, they would have paid their expenses in advance. If their payment did not cover the costs of their claims, the group would pay for the expense. On the other hand, if a member leaves the group and has not experienced any claims, their advance payment stays with the group.
RE: Posting of security (Actually, groups are regulated by the Department of Industrial Relations, Office of Self-Insurance Plans)
The group is responsible for the posting of security as new members join the group. When an affiliate member is accepted into the group, the group will post security with the DIR OSIP in the amount of the last three years of member’s incurred losses. The expense of the security (can be posted in many ways including letter of credit, surety bond, posting of cash etc.) is contained in the contribution rate of the group.
All factors considered, members of CAPS-SIG are, on average, saving between 20 – 30% on the workers’ compenstation expense, and are taking control of their exposure through tailored risk (safety and loss) control programs and with the benefit of a contracted third pary claims administrator to properly manage claims.
If you have any additional questions, feel free to contact me.
Rick Brush
Administrator, CAPS-SIG
rbrush@brsrisk.com
I am the owner of a chain of after-school education centers in California. Workers Compensation has always been a problem because they rate you with the same rates as a university, even though we have had over 200 employees over 10 years without a claim. Do you know of a self-insurance group that includes private learning centers?