1.5.3 Assessment Mutual Insurers
Even though assessment insurance companies are prohibited in Florida, they are addressed in the Florida manual. So briefly, we will go over the basic details. There are two methods upon which these insurers charge premiums.
A pure assessment mutual company bases premium costs on the loss sharing method. Members do not pay premiums in advance and the total loss experience is divided among the members so each pays a portion of the total.
The advance premium assessment mutual charges specific premium amounts. If the actual loss is less than the total of the collected premiums, members receive a refund in the form of dividend payments. If the actual loss is more than the total premium amount collected, members' premium rates will be increased to adjust accordingly.
