In May of 2005, California's self-insured groups and affiliates were invited to participate in the formation of the California Alliance of Self-Insured Groups (CA-SIG).
The Alliance was created to provide a unified voice for self-insured groups ("SIGs") in the State of California. This unified voice provided SIGS with much greater access and credibility to both the legislature and the Department of Industrial Relations (DIR), Office of Self-Insured Programs (OSIP) - the agency charged with SIG oversight.
CA-SIG also was formed to provide a resource that would allow SIGS and their affiliates (group administrators, third party administrators, workers' compensation insurance brokers, attorneys, etc.) an opportunity to work more closely together toward common goals thus allowing he industry to develop and grow in California.
With the adoption of Articles of Incorporation and Bylaws, CA-SIG was launched. In 2010, the Alliance developed a more formal dues structure and engaged the services of an association management team to move the goals of the organization forward.
These goals include SIG accreditation standards, developing opportunities for the education of our members, submitting written suggestions to regulatory changes, and creating opportunities to network as self-insured groups grow in California.
History of Self-Insured Groups
In 1994, legislation in California was signed into law authorizing groups of private employers to form workers' compensation group self-insurance programs. Because of the implementation of open rating in 1995, rates declined to historic lows over the next few years. As a result, employers did not begin to take advantage of the money saving opportunities group self-insurance offered until 2002 when the first group workers' compensation program was approved. Since then, many more employers have discovered that self-insurance is a very cost effective means of taking control over their workers' compensation insurance responsibilities.
While this concept is new to the private sector in California, the public sector has taken advantage of the cost savings for decades in the form of Joint Powers Authorities (JPA). Cities, counties and various other public entities have pooled their risk and financing to make sure product is available and more affordable. The private sector model is based on this very successful historical public track record.
Today, approximately half of all public entities in the U.S. are participating in some form of insurance risk pooling.