POOLING OF RISK Flashcards
What is pooling of risk?
The principle that the losses of the few are paid for by the premiums of the many.
What does the law of large numbers mean?
Similar risks/data helps to predict claims.
What must each person, contributing to the pool, pay based on the amount of risk they bring?
A fair premium.
What is an equitable premium?
Fair contribution.
When deciding on equitable premiums, what do insurers take into account?
Discrimination factors.
What are discrimination factors?
The different elements of risk brought to the pool by each of the policyholders.
What is the CJEU
Court of Justice of the European Union.
In 2011, what did the CJEU rule that insurers could no longer use as a premium calculation tool in deterring which benefits would be offered.
Gender
