HOW DO THE ASSESSABLE/PARTICIPATING PROVISIONS OF THE POLICY WORK?
Policies contain both Assessable and Participating Policy Provisions due to the nonprofit structure of the FMMJUA. Subject to plans approved by the Office of Insurance Regulation, surplus funds, after payment of claims and expenses are returned to policyholders. Should there be an underwriting deficit, individual policyholders for the deficit years may be required to pay premium contingency assessments, not to exceed one-third of the individuals premium paid for the association year for which the deficit was recorded. Remaining underwriting deficits would be fully absorbed by the participating insurance companies, self-insurers and risk retention groups. Actual loss experience and rate levels are the major factors that cause a surplus or deficit. Refunds to policyholders have occurred. Assessments have not occurred.
