YOU ASK:

What is the definition of Shared Market?

WE ANSWER:

A Shared Market refers to a system developed by the state, the government and by insurance companies that enable people to buy insurance for risks that are not covered in the regular market.

These usually involve state-sponsored pools - the state requires insurance companies licensed to be part of the pool of insurers that cover unique, undesirable or large risks. These include Fair Access to Insurance Requirements (FAIR) plans and assigned risk plans.

When an application comes up, the state can pick from the pool and assign the selected insurance company to cover the risk. The amount of risk the insurance company is required to assume depends on the size of market share it has (with respect to its premiums in the voluntary market).

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