A little-known organization that helps 17 towns and school districts buy cheaper health insurance says it’s going under, prompting the state to step in.

The non-profit New Hampshire Interlocal Trust is one of four pooled risk-management programs operating in the state. Last week it told its members it would dissolve on June 30, the end of the fiscal year. This has led the Secretary of State’s office to say it “will be taking all necessary and appropriate steps to protect the interests” of its member government groups.

Another pooled risk management program, HealthTrust, is also under scrutiny from the state because of concerns that it doesn’t have enough financial reserves to cover possible losses, said Secretary of State Dave Scanlan.

A bill working its way through the legislature, SB297, would change requirements for such programs and give the state authority to oversee them if they face insolvency. The bill has passed the Senate and will be considered by the House.

“We had become aware of financial issues with the two. We reached out to meet the organizations but were met with delay tactics, legal challenges, to the point that I finally decided that we have to deal with this through legislation,” Scanlan said.

Pooled risk-management programs were authorized by state law in 1987 to help smaller communities self-insure for employee health insurance or against liability or property damage.

Under self-insurance, communities or businesses take on the risk of costs or losses rather than buying coverage from insurance companies. This can lower their annual expense, partly because pooled programs are exempt from federal and insurance taxes and some regulations, but the programs need a large number of people to be covered in order to spread out the risk.

Cities such as Manchester and Nashua are big enough to self-insure on their own, but most towns, school districts, counties and other local governments in New Hampshire are not. Because of that the legislature created pooled risk management programs to give them a way to band together.

Of the four programs operating in New Hampshire, Primex deals with property and liability insurance while the other three, including HealthTrust, deal with health insurance. SchoolCare and Primex are not of concern, Scanlan said.

The program is overseen by the Secretary of State’s Bureau of Securities rather than the New Hampshire Insurance Department because the programs are not insurance companies. They act as actuarial agents for the pooled group getting coverage from insurance companies.

New Hampshire Interlocal Trust signed up an administrative services agreement with Harvard Pilgrim, the health insurance company.

David Brooks can be reached at dbrooks@cmonitor.com.