Definitions: Assigned Risk Plan

Assigned Risk Plan: Sometimes called the Pool, this is a mechanism established by individual states to make sure that employers can obtain WC insurance even if insurance companies are not willing to write such insurance on a voluntary basis. Assigned Risk plans in many states carry higher rates than the voluntary market.

If your company is in the Assigned Risk Plan, you must do everything that is possible to get out of it ASAP. Why? For instance. in a certain state, the Advisory Loss Cost for an Administrative Assistant Classification Code (8810) was 41 cents per $100. The same 8810 Classification Code in the Risk Pool was $1.41 per 100.

That is almost a 400% increase. How does a company remove themselves from the Risk Pool?

We will talk about that next time.