How Are Self-Insured Groups Regulated?
Self-insured groups must receive approval to operate from the workers’ compensation agency or the state insurance department, and the qualification standards vary from state to state. Self-insurance groups are required to follow the laws and regulations set forth by the state from which they are operating. Although the specific requirements for the administration of self-insurance groups may vary, the state regulatory authority’s role is to ensure the group’s ability to administer and pay claims through appropriate planning and funding. Coverage requirements: Most regulatory authorities require that a self-insurance group purchase additional coverage, such as excess insurance on both a specific and aggregate basis to insure that they can pay catastrophic losses. The amount and type varies by state. In the unlikely event that a catastrophic event occurs, this coverage is in place so that the group’s assets will not be exhausted. Financial requirements: The regulatory authorities require
