NYSIF Reminds Businesses of the Potential Costs of Self-Insured Trusts

December 10, 2009

The December 10, 2009, edition of the New York Times contains an article by Steven Greenhouse entitled "State Sues Administrator of Workers’ Compensation," describing a lawsuit filed by New York's Attorney General against CRM Holdings for fraud. Mr. Greenhouse's article states the lawsuit asserts that CRM engaged in deceptive and illegal practices to attract business.

The Poughkeepsie Journal also writes about the suit in "Cuomo starts action to sue CRM for fraud," and includes statements from the company denying the charges.

NYSIF takes this opportunity to encourage businesses to carefully consider all aspects before joining a self-insured trust, including:

• Every member of the group is responsible for each others' losses. This is called joint and several liability. 
• It is not easy, and can be costly, to remove yourself from the plan.
• Your initial cost is a contribution and may not reflect your true premium cost.
• Be sure to know who the other participants are. Ask if they have similar loss experiences as you and if they are of a similar size.