S2018 #8
For part c ii, the examiner report gives two answers which seem to contradict each other.
The insureds who cannot obtain coverage, apply through an agent or broker and the
application is forwarded to a syndicate or voluntary carrier who services the policy for its
duration. All insurers writing property coverage in the state share premiums and losses
based on their market share (as a percent of written premium).
Policies are issued and serviced by private companies who collect premium and pay
losses. Policies are assigned to insurers based on their market share.
For instance, one of the answer states FAIR premiums and losses are shared by all property insurers in the state, while the second states that an individual policy's premium/loss is retained by the private company that policy is assigned to.
Is the reason both answers were accepted in the examiners report, because FAIR plans can be administered in multiple ways depending on the state?
Comments
These two answers mean the same thing.
In the second answer, the private company services these policies by collecting their premium and paying their losses, but it doesn't assume the premium or loss.