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Resolution Trust Corporation: Immediate Action Is Needed to Control Insurance Costs

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Report Type Reports and Testimonies
Report Date Sept. 20, 1991
Report No. GGD-91-119
Subject
Summary:

GAO examined the Resolution Trust Corporation's (RTC) insurance-related policies, procedures, and initiatives, focusing on: (1) RTC actions to control insurance costs; and (2) the amount spent on inefficient and unneeded policies.

GAO found that: (1) although RTC has taken steps to assess its overall condition in relation to insurance, develop a long-term insurance plan, and hire contractors with risk management expertise, more could be done to control insurance premium costs; (2) RTC has spent more than a year developing the self-insurance program, but its plans are still incomplete; (3) between February and August 1991, RTC could have saved $10.5 million on insurance premiums by raising policy deductibles to $100,000; and (4) RTC missed opportunities to save on insurance cost because it delayed getting the self-insurance programs started, did not make greater use of blanket policies, and did not cancel policies it no longer needed.

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