Currently in Mississippi there are 15 self-insurance groups. These groups represent approximately 6,000 employers with about $176,000,000 in annualized premiums. Also, there are approximately 143 individual self-insured corporations in the state.

This data indicates that self-insurers represent a large portion of the workers' compensation market in Mississippi. Many insurance carriers prefer that groups not exist. They no longer have the power to dictate rates and changes in the workers' compensation market. Many associations and their members feel it is important to have stable voluntary and self-insurance markets. To have a market that is totally controlled by insurance carriers would take us back to where the state was in the 80's. Many self-insurers have been quite successful in controlling costs through aggressive claims management and enhanced safety programs.

To counter the increasing expense of workers' compensation programs, many corporate managers looked into new concepts for controlling costs. Traditionally, risks would be transferred to insurance companies in return for premium payments. This is not managing risk, but simply paying for risk coverage. When premium dollars are paid to the insurance company, management not only relinquishes all control over these funds, but has little influence over important matters such as claim control procedures.

In the area of workers' compensation, self-insurance programs have been developed to offer substantial premium reductions, improved claim control, and enhanced loss prevention control. Self-Insurance is a concept which gives management direct access to benefits provided by risk management techniques and comprehensive loss control engineering. Employers who are large enough can individually self-insure and the small- to medium-sized employers can enter a group self-insurance program in which groups of employers join together to self-insure their liabilities.

For many years in Mississippi, only large corporations could take advantage of self-insurance programs. In the late 1980's, the state permitted the formation of group self-insurance funds by smaller businesses. It was not until the early 1990's that the group self-insurance concept grew. Many carriers in the state refused to write workers' compensation coverage during this period. This forced associations to form self-insured groups to give their members affordable and effective workers' compensation coverage. In other words, self-insured groups were the result of insurance carrier customs and practices.