Self-Insurance

What is Self-Insurance?

Self-Insurance is The conscious and voluntary decision of an organisation to retain specific risk exposures within pre-determined limits of financial consequences and to finance all retained losses using a variety of loss funding mechanisms. Importantly, self-insurance, as the term implies, requires an organisation to determine notional premium for risk exposures across the organisation and to offset current and future losses from notional premium deposited in accumulated financial reserves. True self-insurers establish self-insurance risk assessment, loss reserving and claims management functions along similar lines to approved insurance companies.

 

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