Assigned Risk Fund Retention Clause Samples
The Assigned Risk Fund Retention clause establishes the obligation of a party, typically an insurer, to maintain a specified portion of risk within an assigned risk pool rather than transferring it entirely to reinsurers or other entities. In practice, this means the insurer must retain a minimum percentage of liability for policies issued under assigned risk plans, which are often used for high-risk policyholders who cannot obtain coverage in the standard market. This clause ensures that the insurer remains financially invested in the performance of the assigned risk pool, thereby promoting responsible underwriting and risk management.
Assigned Risk Fund Retention. (A) The Company shall retain a 20 percent interest in premium and associated ultimate net losses in the Assigned Risk Fund in each State. The remainder is ceded to FCIC.
(B) The associated net book premium of eligible crop insurance contracts assigned to the Assigned Risk Fund shall not exceed 75 percent of the Company’s net book premium in each State.
(C) Unless otherwise specified in the Agreement, in the event the percentage of net book premium for eligible crop insurance contracts in the Assigned Risk Fund exceeds 75 percent of the aggregate net book premium for any State, the amount of premiums and associated liabilities in the Assigned Risk Fund will be reduced pro-rata to 75 percent and the excess will be assigned by FCIC to the Commercial Fund for that State.
Assigned Risk Fund Retention. (A) The Company shall retain a 20 percent interest in premium and associated ultimate net losses in the Assigned Risk Fund in each State. The remainder is ceded to FCIC. (B) The associated net book premium of eligible crop insurance contracts assigned to the Assigned Risk Fund shall not exceed 75 percent of the Company’s net book premium in each State.