A Self Insured Group is a group of employers in a common industry who have joined together to provide workers’ compensation benefits. The group is a California “Non-Profit Mutual Benefit Corporation” that only exists to benefit the members. Subsequently, the members own the self insured group.

The way it works is simple, yet effective. Group members make contributions to the self insured group, and the self insured group pays expenses and claims for injured workers. The funds left over are called “surplus,” and this would usually be an insurance company’s profit. In a self insured group, however, the members own the surplus, and it can be used for dividends, rate reductions, or invested. While remaining in the fund, the surplus earns interest at market rates.

A self insured group directly contracts for services normally performed by an insurance company, and some of the services secured on behalf of members include:

• Program Administration
• Safety and Loss Control Services
• Claims Administration (TPA)
• Independent Accountants and Actuaries
• Excess Insurance

All of these, working together, mitigate exposures and ensure a successful and profitable self insured group.