Self-insured employer regulations and contacts
A self-insured (also known as self-funded) workers compensation plan is one in which the employer assumes the financial risk for providing workers comp benefits to its employees.
Self-insureds are required to secure their obligation to pay compensation in the event of insolvency and they are regulated by the Workers Compensation Board of Indiana (Board). The Board maintains a List of Self-Insured Employers on its website. Current requirements include:
- audited financial statement done within last 6 months
- in business for 5 years, or a guarantee from parent corporation
- specific and aggregate excess insurance
(Note: both specific and aggregate excess coverage written together can provide protection against the catastrophic occurrence (specific excess) and the unusually heavy frequency of claims (aggregate excess).
- surety bond of at least $500,000
- claims administration facility or approved service company
The Board may consider the following factors in determining if the employer could qualify for self-insurance.
(a) Profit and loss history.
(b) Organizational structure and management background.
(c) Compensation loss history and proposed excess insurance coverage.
(d) Source and reliability of financial information.
(e) Number of employees.
(f) Excess insurance.
(g) Guarantee by parent company.
(h) Surety bond.
(i) Claims administration.
(j) Dunn and Bradstreet rating, if any.
There are no uniform rules that apply to excess insurance. Excess insurance provisions differ widely from one carrier to the next. Each carrier files their own forms with the Department of Insurance.