Robert is risk manager of a mid$-$sized company that purchased a guaranteed cost insurance program for workers compensation losses. Their workers compensation loss experience has been good, but they would like to initiate a loss control program because most employees are new to the company. They would also like to increase capital in an effort to expand their operations. Robert has decided to consider a pool for insuring workers compensation losses to reduce insurance premium and administrative charges. Which one of the following is true regarding insurance pools?

Available answer options

Select only one option

A

If a member of the pool has poor loss experience, Robert$$s company may end up paying for their losses.

B

The pool can provide loss control services to Robert$$s company.

C

The pool will help raise the necessary capital to fund expanding operations.

D

The pool will increase uncertainty for retained workers compensation losses.Robert is risk manager of a mid$-$sized company that purchased a guaranteed cost insurance program for workers compensation losses. Their workers compensation loss experience has been good, but they would like to initiate a loss control program because most employees are new to the company. They would also like to increase capital in an effort to expand their operations. Robert has decided to consider a pool for insuring workers compensation losses to reduce insurance premium and administrative charges. Which one of the following is true regarding insurance pools?

Available answer options

Select only one option

A

If a member of the pool has poor loss experience, Robert$$s company may end up paying for their losses.

B

The pool can provide loss control services to Robert$$s company.

C

The pool will help raise the necessary capital to fund expanding operations.

D

The pool will increase uncertainty for retained workers compensation losses.