Self-Administration of Insurance Policies Are You Qualified To Do It and, If You Err, Who Pays?

This article originally appeared in Anderson Kill's Self-Funding Advisor (Winter 2006/2007).

Just in case corporate law departments don’t have enough to think about, here’s one more thought for the new year—do corporations that self-administer their health, life and disability insurance plans do their jobs correctly, and does anyone fully appreciate the exposure if they don’t?

These questions are important because selfadministration can be like anesthesiology: 99 percent boredom and 1 percent sheer terror. Much of the job involves fairly routine record-keeping, not likely to be of interest to anyone outside of the Human Resources department. But, when something goes awry, the consequences can be great, triggering legal liability, employee relations issues, financial exposure and considerable legal complexities.