Are there thresholds or indices that a consumer can use to gauge the financial stability of an insurance company?
• Yes. The three common indices are: • Premium to Surplus Ratio – Threshold is less than a ratio of three premium dollars for every one dollar of surplus • Reserve to Surplus Ratio – Threshold is less than a ratio of five reserve dollars for every one dollar of surplus • Loss to Surplus Ratio – Threshold is ten to one, or the ability to sustain greater than 10 full limit losses from surplus • What if youre wrong? What happens if claims are much more frequent than is anticipated? – Central Pennsylvania Physicians has the same remedy for increased claim volumes or higher than expected claim severity as every other carrier premiums would be increased to fund for the losses. • Does Central Pennsylvania Physicians participate in the Pennsylvania Property & Casualty Insurance Guaranty Association (PIGA)? – No. As a risk retention group, Central Pennsylvania Physicians neither pays into nor receives any benefit from the State Guaranty Fund. Central Pennsylvania Physicians founders believed an
