Self-insurance options

Article Abstract:

Approximately one-half of the commercial insurance market is represented by self-insured corporations; property and liability insurance are the areas where most self-insurance policies have proved cost-effective. As a rule of thumb, a corporation should not consider self-insurance until its workers' compensation insurance premiums reach the level of $150,000 to $200,000. The captive insurance form of self-insurance, in which a subsidiary company is established to provide the coverage required by the parent company, is discussed and court rulings in this area are analyzed. Captive insurance and conventional coverage are deemed preferable to 'going bare'; however, there are situations which require companies to do without insurance, and these circumstances are also discussed.

Hospital and medical service plans, Accident and health insurance, Finance

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IRS targets retrospectively rated insurance programs

Article Abstract:

Retrospectively rated loss financing programs are used to allow the insured to pay for its own losses within a range established by the amount of premiums paid, and within established per-occurrence loss limits. Companies that use retrospectively rated insurance programs for purposes other than a paid-loss self-insurance program run the risk of being audited by the IRS. Variations on retrospectively rated plans that have been disallowed by the IRS include incurred-loss retro plans, compensating balance plans, and paid-loss plans in which current-year deductions are claimed for items other than paid losses and expenses.

Finance, taxation, & monetary policy, Taxation, Laws, regulations and rules, Accounting and auditing, Tax auditing, Tax audits, Business insurance, United States. Internal Revenue Service

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Exploring self-insurance

Article Abstract:

For the past 20 years, companies have found it increasingly cost-effective to elect self-insurance over conventional forms of insurance coverage. The self-insurance evaluation process is outlined and various forms of self-insurance are discussed, including qualified self-insurance, captive insurers, insurance trusts, and 'going bare'. The economic aspects of self-insurance are compared to average premium levels for various forms of conventional coverage, and methods for selecting service providers are also examined.

Fire, marine, and casualty insurance, Management

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