Stigma of High Risks - WC vs Auto
Just to clarify...
So in auto insurance, the stigma of residual market only exists in Assigned Risk Plan, not with JUA or RF.
However, in WC, the stigma of residual market exists in all 3 mechanisms. Correct?
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Just to clarify...
So in auto insurance, the stigma of residual market only exists in Assigned Risk Plan, not with JUA or RF.
However, in WC, the stigma of residual market exists in all 3 mechanisms. Correct?
Comments
As far as I see, the way Germani describes ARP for workers comp is the same as the way Cook describes ARP for personal auto. So, the "stigma" should exist in both of them.
Yes, I got that part.
In Cook wiki, it clearly says that for JUA and RF, there is no such "stigma" since drivers do not know.
I am a bit unclear whether this "stigma" exists in the other 2 mechanisms for the WC residual market - JUA and reinsurance pool. Not sure if this is sth I really need to know for the exam. Seeing it's emphasized in the personal auto and how similar WC and personal auto residual markets are, makes me wonder about it.
In page 11 paragraph 3 of the text where Germani describes JUA and RF for workers comp, she does not state whether the high risk is aware of being assigned to the residual mechanism. However, she does state that these mechanisms closely parallel the auto mechanisms. From that, it's fair to assume stigma is removed in these two for workers comp as well.