An assigned risk pool, or residual market, is a mechanism to ensure that all entities will obtain insurance even if they are rejected individually by insurers. Rules of operation often provide for less favorable financial terms than the normal, or voluntary, market would provide.
In workers' comp, employers might be forced to enter the pool because their industry risks are unacceptable to individual insurers (such as dynamite manufacturers) or because their injury experience has been poor. An ARP also has some capacity to facilitate insurance in a period of widespread market disruption until the delivery of more long lasting remedies.
April 1, 2005
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