Phabbyfundz
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The assigned risk plan, the most common type, currently found in 42 states in the district of columbia, generally is administered through an office created or supported by the state and governed by a board of representing insurance companies licensed in the state. Massachusetts began a 3 year process of changing over to an assigned risk plan beginning in April 2008. It originally had a reinsurance pooling facility.
When agents or company representatives are unable to obtain auto insurance for an applicant in the market voluntary market, they summit the application to the assigned risk plan office. These application are distributed randomly by the automobile insurance plan to all insurance company that offer automobile liability coverage in the state in the proportion to the amount of their voluntary business. Thus if on a given day the plan receives 100 applicants from agents around the states, a company with 10 percent of that states regular private passenger automobile insurance business will be assigned 10 of those applicants and will be responsible for all associated losses.
When agents or company representatives are unable to obtain auto insurance for an applicant in the market voluntary market, they summit the application to the assigned risk plan office. These application are distributed randomly by the automobile insurance plan to all insurance company that offer automobile liability coverage in the state in the proportion to the amount of their voluntary business. Thus if on a given day the plan receives 100 applicants from agents around the states, a company with 10 percent of that states regular private passenger automobile insurance business will be assigned 10 of those applicants and will be responsible for all associated losses.