YOU ASK:
What is the definition of Residual Market?
WE ANSWER:
The Residual Market refers to the facilities or programs, which provide insurance coverage for products that are not readily available in the regular market, or for those who cannot get insurance coverage otherwise.
Examples of a residual market include FAIR plans, the Joint Underwriting Associations and assigned risk plans. The residual market is also called a shared market since this involves the pooling together of insurance companies. Residual markets are usually state-sponsored, where insurance companies licensed to operate in a certain state is mandated to provide coverage to these "undesirable risks". Their assigned coverage is in proportion to the insurance company's share in the total voluntary market premiums.
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More insurance terms around residual market:
- Retention
- Retrocession
- Retrospective Rating
- Return on Equity
- Revocable Beneficiary
- Rider
- Risk
- Risk Management
- Risk Retention Groups
- Risked-Based Capital
- Residual Disability
- Residual Disability Insurance
- Reserves
- Repurchase Agreement / Repo
- Replacement Cost
- Renters Insurance
- Renewable Term Insurance Policy
- Relation of Earnings to Insurance Clause
- Reinsurance
- Reinstatement