On 05/06/2010 03:19 PM, Upscale wrote:
On Thu, 06 May 2010 15:00:44 -0600, Chris Friesen
wrote:

Think about that for a second. The whole point of insurance is to pay
someone else to assume the risk on the behalf of the insured entity.
Generally it's done because the entity buying the insurance cannot or
doesn't want to incur all the risk themselves.

YOU think about it for a second. If they're self insured then they've
had to prove to the powers that be that they have the secure funds on
hand to pay for whatever amount they're insured for. This secure fund
is an insurance entity completely set aside from other day to day
operations. In other words, if they went bankrupt immediately for some
reason, the money would still be available to pay off their insurance
debt.

I still think there's a distinction there since the corporation is
directly assuming the risk. This makes any claims a direct loss to the
company rather than just a possible increase in insurance rates.

As for having secure funds set aside, it may be different in this
particular case but it's easy to find examples of cases where
self-insured employers have gone bankrupt and there was no money to pay
the claims.

Chris