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Report on Self Insurance Groups - page 20 / 40





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Report on Self Insurance Groups

agreements that the Director will require. Upon a recommendation by SISF that a SIG’s deposit be adjusted to reflect revised expected future liabilities or a recommendation that other action be taken to bring a SIG into compliance with statutes and regulations or to revoke a certificate of consent to self-insure, the Director should take the recommended action unless after notice and opportunity to be heard, the SIG demonstrates to the satisfaction of the Director that its estimate of future liabilities is adequate and that it is in compliance with applicable statutes and regulations. SISF should have standing to fully participate in any such proceedings. The powers of the Director should be reviewed to determine whether the Director already has the authority to carry out these recommendations or whether an express delegation of legislative authority is required.

Public Disclosure of SIG Information

There is a debate over whether the financial or actuarial reports of SIGs should be disclosed publicly. One of the arguments, loosely stated, is that those who are affected by the action or inaction of the government have an interest in assuring that the government is doing its job. Certainly the trend is toward more openness in government. On the other hand, government regulators routinely have access to confidential private information about regulated persons or entities, and this information is routinely held in confidence. The dispute cannot be resolved simply by generalizations about transparency or privacy, nor by analogies to the disclosures required of insurers or the privacy afforded to stand-alone self-insureds.

CHSWC recommends that the guiding principle should be to maximize the solvency and security of SIGs for the protection of those who are most directly at risk in the event of the insolvency of a SIG. Those are the SIGs’ members and the SISF.

The employers who join a SIG or remain in a SIG are relying in part on the State’s supervision of the group, and they are directly at risk if the SIG becomes insolvent. Later in this report, it is recommended that financial and actuarial data on each SIG be made available to its members and prospective members and their representatives.

The Self InsurersSecurity Fund (SISF) is the other entity most directly affected by the soundness of the regulator’s oversight of SIGs. As discussed above, CHSWC recommends that SISF be given direct access to SIGs’ financial and actuarial data. The information available to SISF would not include confidential financial information about any group member, only the groups themselves. Under appropriate confidentiality regulations, the data would be provided only to authorized agents of SISF and not to employer members of the SISF or its board.

With full disclosures to SISF and with specified disclosures to SIG members and prospective members, wider public disclosure of SIG financial or actuarial data would probably not further


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