Who bears the operating losses and expenses of the Reinsurance Facility?

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Multiple Choice

Who bears the operating losses and expenses of the Reinsurance Facility?

The operating losses and expenses of the Reinsurance Facility are shared by all insurers that write auto liability in the state. The facility is funded through assessments on its member insurers, spreading the costs of high-risk drivers across the industry rather than falling on a single insurer, the policyholders alone, or the government. When losses and expenses occur, charges are allocated to participating insurers (typically in proportion to their premiums written for the lines covered by the facility), so every insurer in the system contributes to covering those costs.

The operating losses and expenses of the Reinsurance Facility are shared by all insurers that write auto liability in the state. The facility is funded through assessments on its member insurers, spreading the costs of high-risk drivers across the industry rather than falling on a single insurer, the policyholders alone, or the government. When losses and expenses occur, charges are allocated to participating insurers (typically in proportion to their premiums written for the lines covered by the facility), so every insurer in the system contributes to covering those costs.

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