Self-insurance groups are formed by smaller companies to provide workers' compensation, often described as 'shared risk groups.' What is their purpose?

• A. To pool risk and pay claims for members' workers' compensation
• B. To purchase life insurance for members' executives
• C. To regulate member companies' insurance programs
• D. To insure only property risks for members

Answer: (A)

Self-insurance groups are all about pooling the risk among several small employers so they can fund and manage workers’ compensation claims together. By combining resources, members share the costs of losses and claims, making coverage more affordable and predictable and giving them more control over how claims are handled. This is specifically focused on workers’ compensation, not life or property insurance, and it isn’t a regulatory body. The idea is to spread the risk across the group so each member isn’t bearing large, individual losses alone.