Rather than try to put it in my words, I copied this from the Diocese of Scranton website that does a good job explaining it...
Such a program (self-insurance) demands an increased awareness and responsibility for safety conditions, and the correction of improper, hazardous or unsafe situations. The benefits of such awareness will be a reduction in total claims, and continued savings in the cost of insurance to all parishes and agencies. We maintain very high levels of Self-Insurance Retention. Above these levels, we have purchased various levels of Excess Insurance to cover against large catastrophes. Our program must, therefore, be managed in accordance with the recognized principles and practices of underwriting and claims adjustment that is required under the terms of our excess policies.
ADVANTAGES TO EACH PARISH
⦁ All Risk Coverage
⦁ No co-insurance requirement
⦁ All Properties fully protected
⦁ Newly acquired properties automatically insured
⦁ Liability exposures fully protected
⦁ All parishes organizations and activities protected
⦁ Automatic coverage for Parish and Diocesan events
⦁ Favorable costs