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History of Self-Insured Groups

In 1994, the California Legislature authorized groups of private employers to form Group Self-Insurance programs for their workers' compensation liabilities. Because open rating was also allowed 1995, causing rates to decline to historic lows over the next few years, employers did not begin to take advantage of this money saving opportunity until 2002, when the first group workers' compensation program was approved. Since then, more employers have decided that taking control over this portion of their responsibilities now and for the future, through group self-insurance, is very cost effective.

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.