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 What is a Self Insured Group? A SIG is a California Non-Profit Mutual Benefit Corporation formed exclusively for the purpose of providing workers' compensation under Chapter 8, Section 2 of the California Code of Regulations. How does a Self Insured Group work? Group members make contributions to the SIG, and the SIG pays all expenses, provides safety & loss control services, and pays claims for injured workers. The funds left over are called "Surplus," this would be an insurance companies profit. In a SIG the members own the surplus and it can be used for dividends, rate reductions, or even payment holidays. Who handles the SIG's Excess Insurance? Excess Insurance protects the SIG from large claims, and is provided by an excess carrier with an AM Best rating of A+XV. What do certificates of insurance look like? The SIG issues standard certs that look just like your current ones. The SIG is listed as the "Insurer," and we have experienced little difficulty with acceptance of certificates. Most large companies are experienced in dealing with SIGs or individual self insureds Do you offer other lines of coverage? No. Workers' compensation is the only coverage offered by the SIG. What is the down payment? Each member posts a deposit with the group that is the average of their last three years losses or 10% of the annual premium, whichever is higher. How often are payments made? In a SIG, your payment is a contribution, and is made on a monthly basis using a self-reporting form that takes only a few minutes to fill out. Self reporting like this cuts down on large swings discovered in later audits. What about audits? Member audits are conducted yearly. The SIG is audited yearly, as well. In addition to the audits, an actuarial study is performed to ensure that members are contributing correctly. What is the "Indemnity Agreement?" It is a Joint & Several Liability Agreement. In a SIG, the liability is shared by the members on a pro-rata basis. In the event of a worst case scenario, and there is a deficit, and if an employer's contribution accounts for 2% of the Group, his share of the liability will be 2%. Keep in mind that over 200 California public entities are self insured, and not one of them ever used the J & S even during a period when 25 insurance companies went bankrupt. What happens to my X-Mod when I join the Group? Each SIG has flexibility when it comes to X-Mods. Some SIGs combine the mod factor into the contribution, while others continue to recognize the mod factor and let members calculate their contribution using their X-Mod. What if a member decides to leave the Group? A member can leave the Group with 180 days notice. The above statements are for informational purposes only in this "short answer" form. Please ask your agent for complete details, or contact us for more information. 800-592-0047 |
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