battle cards 13&14

oxalisoxalis
edited March 2022 in PACICC.Comp

Hi,

I'm not sure I understand these 2 battle cards

which mechanisms smooth costs:Compensation fund can be drawn upon to smooth annual assessments
(how does this work? PACICC can decide to borrow money instead of assessing other solvent insurers? and this cost less?)

which mechanisms reduce insurer levies: Liquidation and 3rd party recovery reduce insurer levies/assessments
(what levies are we referring to? levies and assessments here mean the same thing?)

Thank you

Comments

  • Staff-T1Staff-T1

    Hi,

    You are correct on your first point - PACICC can borrow from the compensation fund. This is done to delay implementing an assessment until it is better able to estimate its exposure. It's not really about cost reductions.

    Indeed levies and assessments mean the same thing. Assessments are contributions from solvent insurer to help cover the liabilities of an insolvent insurer

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