MMC Securities Corp. Completes $510M Collateral Program For North Carolina Self-Insurance Security Association

Raleigh, NC - MMC Securities Corp., an affiliate of Marsh Inc., the risk and insurance services firm, recently announced it has completed a $510M alternative collateral program on behalf of the North Carolina Self-Insurance Security Association for its Security Fund.

The North Carolina Self-Insurance Security Association provides workers compensation benefits directly to eligible individuals in the event of a default by any member company that self-insures its workers compensation liabilities in North Carolina. All North Carolina employers with more than three employees are required to procure workers compensation insurance either through the commercial market or through self-insurance.

MMC Securities Corp. created the program, known as the Association Aggregate Security System, to achieve a number of objectives: to enable the North Carolina Self-Insurance Security Association to operate more efficiently; to provide an alternative form of collateral (other than letters of credit and surety bonds) for member companies, and to significantly reduce the potential for future assessments.In 2005, the North Carolina General Assembly enacted legislation to facilitate the development of an efficient risk transfer mechanism for the Self-Insurance Security Association.

Stephen P. Gennett, Executive Director of the North Carolina Self-Insurance Security Association, said, "The completion of this transaction protects the benefits of injured workers. At the same time, it contributes to the state's competitive business environment. On behalf of all the Association members, I am grateful for the support of the Department of Insurance and of the General Assembly in facilitating this innovative collateral program."

Quentin Hills, a managing director of Marsh Inc. and global head of Financial Risk Products for MMC Securities Corp., said, "We're always looking for new ways to address the wide variety of risks confronting clients and are pleased to have been selected to work with the North Carolina Self-Insurance Security Association to provide this solution. We look forward to continuing to work with the Association on its risk transfer needs in the future."

MMC Securities Corp. pioneered this approach in California with the implementation of an alternative security program for the California Self Insurers' Security Fund on July 1, 2003. This successful program has been in place for four consecutive program years and currently provides collateral totaling $5.5B for 355 self-insurers. This groundbreaking program has achieved significant results, reversing a $54M deficit on June 30, 2003 to create a $100M surplus on June 30, 2006.

MMC Securities Corp. continues to work with the California Self-Insurers' Security Fund and has completed four programs totaling approximately $22B in risk transfer placements on behalf of the Fund. In October, following a competitive RFP bidding process, the Fund again retained MMC Securities Corp. for another three years, according to MMC.

SOURCE: MMC Securities Corp., Marsh Inc., and North Carolina Self-Insurance Security Association