Alternative Risk Financing

Vaaler Insurance/HCIS has been actively involved in the research and development of alternative risk financing programs. Many large organizations, or groups and associations, wish to retain more influence over their risk and insurance dollars. Traditional first dollar insurance programs may not fit their needs. Once a determination is made to review alternative options, a careful analysis of their specific situation must be completed and a plan can be implemented that may involve self insurance, partial self insurance or a captive owned by the organization or organizations that participate.

There are many different types of risk financing that can be tailored to meet the specific goals of these groups or organization. Vaaler has been active in developing the following:

Dividend Programs — Vaaler has negotiated special dividend programs for individual accounts as well as association business. These programs provide the opportunity for insured clients to benefit from their favorable loss results. This type of program provides a potential benefit for favorable results without the potential negative consequences possible in other types of risk sharing programs.

Risk Purchasing Groups — HCIS, our healthcare division, currently manages two risk purchasing groups for healthcare facilities. These groups have continuously paid profit sharing dividends to member facilities as a percentage of the general and professional liability coverage they purchase.

Reciprocal Insurance Company Formation — Vaaler Insurance originated and was Attorney-in-Fact for a reciprocal insurance company, Health Facilities Insurance Exchange. It was originally formed to provide medical professional liability coverage during the medical malpractice crisis of the 1980’s. The reciprocal later provided a quota share reinsurance layer for medical professional liability coverage.

Self-Funded Workers Compensation Program Development and Management — Vaaler/HCIS provides marketing and management services to Healthcare Select, a Minnesota-based self-funded workers compensation program. Originally started in 2003, the group has 15 member facilities.