Wording

thesuperactuary

I have a question.

On the wiki/battleact, when it says " PACICC assess X", does it imply PACICC assesses insolvent insurers to All participating insurers

Thank you

Staff-T1

In general assessing means collecting contributions here and would be directed at participating insurers. Assessments are meant to cover for insolvent insurers

ChristoRoyer

So if I understand well, the assessment is done whenever an insurer becomes insolvent, is that right?
So to summarize:

• When an insurer becomes insolvant, PACICC can advance the amounts to the policyholders of the insolvent insurer with a loan from the Compensation Plan.
• Meanwhile, PACICC may receive amount from the liquidator, but that probably won't be enough for all policyholders.
• After that, it will calculate the total amount required to pay all insureds (minus what was recovered) and charge all other insurers from the jurisdiction in proportion of their market share.
• That assessment cannot be more than 1.5% of the written premium of the insurer in that jurisdiction.

I'm probably wrong somewhere (especially my first point), but could you clarify what I missed? I had some difficulties too to understand the concept at first.

I also read there was an annual assessment as well. Is it to build the fund? In the Battlecards, it is said that the funds can help to smooth the annual assessment so I'm not sure of that too.

Staff-T1

No, I think you summarized it succinctly. For point one, it is not mandatory for PACICC to obtain a loan. The loan is mostly only if PACICC is unable to adequately gauge the exposure to insolvency. I think it is referring to the maximum annual levy an insurer can pay? Did not find anything else related to annual in the material