Page 298 - Reinsurance Management IC85

Reinsurance Management

losses for which there was no reliable method of
calculating accurate premiums.

Pools are used to provide coverage for insurance
covers with expected higher than average
probability of loss that otherwise would be
excluded from obtaining coverage.

In pool several insurance companies may become
member of the pool and participate in the
underwriting results, including premiums, losses,
expenses, and other operations of pools, based on
their proportionate share of similar business written
in the country.

Thus the insurers contribute premium to the pool
according to their market share in the country and
all the expenses, losses are distributed between the
insurers based on the proportionate share.

If the share of the pool exhausts the companies
may contribute in their proportionate share. During
the period of operation of the pool sufficient data

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