Management, Finance, and Personnel: Local Government Use of Self-Insurance (A Case Study from the Urban Consortium)

摘要

The City of San Diego, California has had a centrally administered risk management program for ten years, and has found an economic advantage in having both a central administration and self-insurance. The oldest part of the program, worker's compensation, has been in operation for 14 years with no major problems. The city has found that its self-insurance in this area can be provided at about one-half the cost of insuring with a private carrier. The other elements of the total self-insurance program are newer and thus less amenable to evaluation of long-term results. The Public Liability program is currently administered at less than fifty percent of fully insured cost. The CITY MED program is offered as an employee benefit and so far has broken even. Savings are being used to improve benefits and increase reserves. In general, the advantages to be expected through self-insurance are better control over cash flows by not prepaying losses to an insurance company; elimination of profit margins paid to private carriers; better claims control; and savings on premiums costs.