Report on Self Insurance Groups
Administration of Insolvency
The Director should have standing arrangements with persons or organizations that can be called upon at short notice to take over as administrators or adjusting agents if it becomes necessary for the Director to replace any SIG administrator or adjusting agent. These arrangements will give OSIP the ability to act quickly without having to begin the contracting process after the need has arisen. This need could arise even in situations that do not constitute insolvencies.
One comment litigation that independently
to CHSWC has pointed out that steps should be taken to manage the inevitable
will arise if examined this
and when there is an insolvency of a SIG.
Given that an insolvent group may have [members] in a number of different
counties, the litigation costs may prove considerable unless there is clarification as to how insolvencies are to be administered. There needs to be a clearly articulated judicial process established to oversee delinquency proceedings, including a mandate that any action to enforce a right of equitable contribution of one group member upon others, as well as any other actions against the trustees or group administrators, be filed in the same court as the delinquency proceedings. This would allow for a judicially supervised liquidation of the group and its attendant disputes.‖
The comment refers legislation would be examination.
to Kentucky’s statutes, required in California.
KRS 304.50-135, and suggests that CHSWC recommends this subject for
Too little is known about the actual performance of self insurance groups (SIGs).
supposed benefits are known only congratulatory statements must always
be taken with skepticism, the Commission on
and self- Health and
Safety and Workers’ Compensation (CHSWC) believes there is truth in the claims that insurance can reduce employer costs and improve worker safety and return to work. potential may not be realized in all groups. To better evaluate and quantify whether
group self The same group self
insurance is living compared to the
up to its potential, performance of
the performance of SIGs conventional insurance.
be objectively studied and Workers’ Compensation
Information System (WCIS) operated by the provide a useful database for research once
Division of participants
Workers’ Compensation (DWC) will fully comply with its data reporting