2015 #8 c)
This is a pretty inconsequential question, but the examiner's report lists one similarity between JUA and ARP as "both assign high-risk insureds to specific insurers".
I'm wondering in what sense this is true for JUAs, if no specific insurer assumes the losses, and the servicing is done by the "servicing carrier" rather than any insurer?
Comments
Here's what I think they mean: With the ARP, the high-risk customer can be assigned to any insurer in the state based on WP. That insurer then handles everything related to that customer and covers the losses themselves. That part makes perfect sense.
For the JUA, the risk is "assigned" to one of just a handful of servicing carriers, which are still specific insurers, but are specially designated to "service" customers, even though the losses are being spread to all insurers in the state.
Since this question was only worth 0.25 pts and they only wanted 1 similarity, I probably would have just gone with:
The Cook wiki states the following as a difference between JUA and RF:
JUA:
- policy is serviced by servicing carrier
RF:
- policy is serviced by insurer
However, in reading the examiners report for 2017 Spring #6b, it sounds like the "servicing carrier" is the insurer (previously I thought the servicing carrier was the JUA, but the examiner report explicitly says this is false).
So my question is, what is the difference between "servicing carrier" and "insurer"? Why split hairs over the name if they are essentially the same thing, especially if profits/losses are shared by both JUAs and RFs? Thanks!
Servicing carrier is an insurer contracted by the JUA to service JUA policies. There can be a single or several servicing carriers, depending on the size of the state. So, the difference is, JUA has the policies forwarded to it by all insurers serviced by these designated servicing carriers, whereas in an RF, each insurer passing policies to the RF service those policies themselves.