Which of the following pools would be the best subject for a fully-funded self-insurance arrangement?
A) Automobile physical damage coverage for a national rental car chain, with 100 locations and approximately 3,000 automobiles of similar value at each location
B) Employment practices liability coverage for a petroleum refinery located in Texas
C) Medical malpractice liability coverage for all doctors and nurses employed by a group of 3 hospitals in Florida
D) $50,000 of life insurance on every employee of a life insurance company located in New York, with no physical exam required to obtain insurance

Question

Quizplus · Accepted Answer

A fully-funded self-insurance arrangement generally works best when covering a large number of similar risks, such as a fleet of automobiles at multiple locations. This allows for better predictability of losses and can lead to cost savings for the insured. The other options involve more complex or diverse risks, which may be better suited for traditional insurance arrangements.

Which of the Following Pools Would Be the Best Subject