Each group self-insurer shall have and maintain specific ______ insurance coverage.

• A. Excess
• B. Primary
• C. Umbrella
• D. Reinsurance

Answer: (A)

In a group self-insurance setup, losses are funded up to a self-insured retention from the plan’s own resources. To protect against the big, unexpected claims that exceed that retention, the plan must carry excess insurance. This type of coverage kicks in only after the retention is exhausted and provides a cushion up to a specified limit, giving the group a reliable backstop for high-severity losses. Primary coverage wouldn’t fit because the plan already operates with a self-funded layer and needs a top-up above that layer, not a policy that pays first. An umbrella policy can add broader protection and may distort the intended structure of self-insurance, while reinsurance is typically an insurer’s tool rather than a direct policy held by the self-insured group. Therefore, excess insurance is the appropriate requirement to ensure adequate protection beyond the plan’s own funds.