Self insurance

Provide provisional cover but usually subject to some restriction such as significant excess or a percentage of self-insurance being carried by the client. 

Other insurance products are the so-called "financial responsibility" products. This term includes the tools that require companies to demonstrate to have sufficient financial resources for eventual future environmental damage that may arise through their activities. In its common implementation, financial responsibility implies that a production activity is authorized only if companies can prove that they will be able to financially cover economic claims, for example, using surety bonds, cash accounts, deposit certificates, self-insurances, and corporate guarantees. 

The Sponsor will take out appropriate insurance cover or will provide evidence to the satisfaction of the NHS Trust of self-insurance in respect of its potential liability under clauses 5.1 and... 

Economists have long emphasized that in health care, identification of the consumer is ambiguous. Is it the patient, the physician acting as a professional agent on behalf of the patient, or is it the third-party payer In most but not all countries, pharmaceutical manufacturer sales representatives, called detailers, are permitted to visit physicians in their offices and provide them with promotional material. Representatives from pharmaceutical manufacturers also interact with public-sector payers such as ministries of health, as well as with private-sector payers, such as insurers and self-insured employers in the United States. 

Adverse selection exists when individuals know more about their individual risks than do insurance companies. Under such circumstances, people compare their risks with the best premium offered by an insurance company. Those individuals whose risks are less than the premium will self-insure, leaving the company with above-average risks in its pool. An insurance company might realize this problem only after collected premiums do not cover subsequent claims. If a company then raises premiums, more individuals will opt to self-insure, the process will continue, and the eventual result will be no insurance policies. 

Safety performance also can affect other elements in periodic job performance ratings. Corporate insurance policies in the chemical industry typically include large self-insurance factors— deductibles —which are in the millions of dollars. Any losses which fall within this self-insurance limit are charged to the unit involved. This affects the unit s costs and profitability, also major factors in evaluating the manager s job performance. 

The more money you have, the easier this is to do. For example, you might buy dental insurance. But perhaps your dentist does not choose to participate in such a plan. The policy is good only if you switch dentists. Solution Insure yourself. Instead of paying, say 15, into a policy each month, use the money to build a kitty for future dental bills. Such a fund becomes a self-insurance policy. 

Self insurance works best when the risk is small. Deductibles are, in a sense, self insurance. The more money you have, the higher the deductible can be. If you can afford to pay the first 2,500 of medical expenses each year, a deductible of this amount will greatly lower your monthly medical insurance premium. 

You face a number of risks in the process of daily living. You can generally cover many of them from current assets through self insurance, but here are six that you should consider insuring against. 

On an average basis, insurance companies pay out loss claims amounting to 55 to 60 cents for each dollar received. The balance is used for income taxes, salaries, commissions, administrative costs, inspection costs, and various overhead costs. Theoretically, a saving of 40 to 45 cents per dollar paid for insurance could be achieved by self-insurance. If insurance requirements are great, this saving could amount to a very large sum, and it would be worthwhile to consider the possibilities of self-insurance. 

A careful analysis of all risks involved is necessary when considering self-insurance on possible Josses or emergencies. The final decision should not be based on whether or not the insurable event will occur, because this is impossible to predict. Instead, the decision should be based on the total loss involved if the event or a series of such events were to occur. If an industrial concern has a number of widespread interests and sufficient funds available to handle simultaneous major losses in several of these interests, it might be... 

There are several different ways of applying self-insurance. One method involves depositing money equivalent to an insurance premium into a special company fund. This fund can then be used to handle any losses or emergencies which may occur. At the outset, this fund would be small and would be inadequate to handle any major losses. Consequently, if this method is used, it may be necessary to supply an original base fund or else assume a disproportionate amount of risk until the fund has built up to a practical value. Under ordinary conditions, the premiums paid into a self-insurance reserve are not tax-deductible. 

A second method may be used in which the company assumes all the risk and no payments are made into a reserve fund. This method is designated as self-assumption of risk. Partial self-insurance may be obtained through the purchase of deductible insurance from regular agencies. The purchaser assumes the risk up to a certain amount and the insurance company agrees to pay for any additional losses. 

Self-insurance is being considered for one portion of a chemical company. The fixed-capital investment involved is 50,000, and insurance costs for complete protection would amount to 400 per year. If self-insurance is used, a reserve fund will be set up under the company s jurisdiction, and annual insurance premiums of 300 will be deposited in this fund under an ordinary annuity plan. All money in the fund can be assumed to earn interest at a compound annual rate of 5 percent. Neglecting any charges connected with administration of the fund, how much money should be deposited in the fund at the beginning of the program in order to have enough money accumulated to replace a complete 50,000 loss after 10 years ... 

Sample calculations in reports, 462 Saran, 437, 440-442 Sawing for equipment fabrication, 447 Scale formation in evaporators, 355-360 Scaling for equipment cost estimation, 169-171 Scaling factors for heat transfer, 586-587 Scale-up for equipment specifications, 36-39 Schedule number for pipe, 493 Screen, cost of 567 Self insurance, 264-265 Sensitivity of results for pipe sizing, 367-368 Separators, cost of 559-561 Sequential analysis, 771-772 Series compound-amount factor, 227... 

In addition to organized healthcare, private self-insured corporations may also contract directly with a PBM for services. Depending on the size of the PBM and its willingness to work with small groups, contracts may be written for prescription benefit management for small companies. However, many small companies enlist the services of a TPA for representation when it comes to purchasing the services of a PBM. 

The liability insurance industry is a poor source of information on the drug industry s product liability experiences because companies now largely self-insure for all but the highest liability losses. The best source of information on the costs and implications of product liability law in this industry are drug companies themselves. The Office of Technology Assessment (OTA) found no published data summarizing industry experience.1... 

Third-party payers Private insurance companies, government agencies, and self-insured business that pay medical providers for services given to a patient. 

Employee Retirement Income Security Act of 1974, Public Law 93-406 (ERISA) this law mandates reporting and disclosure requirements for group life and health plans. It also exempts many self-insured employers from many state health insurance regulatory requirements, employer contribution the amount an employer contributes toward the premium costs of the contract. This amount carries widely among employers and is a critical variable in any risk analysis. Employer contributions can be based on dollar amounts, percentages, employment status, length of service, single or family status, or other variables or combinations of the above. 

Of considerable interest to manufacturers will be the Product Liability Risk Retention Act of 1981 which passed the U.S. House of Representatives (as H.R. 21201) on July 28, 1981 and the U.S. Senate, in identical form (as S.1096) on September 11,1981. The legislation, perhaps inspired by cases such as Sindell, discussed previously, was introduced by Senator Robert W. Kasten (R.-Wis.). Among other things, it removes numerous state insurance regulation barriers to the formation of self-insurance groups, and enables product sellers to get together and buy commercial liability policies on a group basis. 

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