NYSIF Encourages Businesses to Learn More About the Potential Costs of Self-Insured Trusts

August 20, 2009

The August 18, 2009, Poughkeepsie Journal contained an article written by Mary Beth Pfeiffer, "Investigations Continue in CRM Case," chronicling the collapse of seven self-insured trusts managed by CRM Holdings, Ltd. NYSIF reminds New York's businesses that there are several points to consider 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. In addition to being responsible for the losses of all group members, employers could also be responsible for the losses suffered by other insolvent self-insured groups. 
• 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. 

To learn more about the potential pitfalls of joining a self-insured trust, please visit the Poughkeepsie Journal's CRM special report page.