Download Alberta Risk Sharing Pool

I.
INTRODUCTION
A. Overview of The Alberta Risk Sharing Pool (Alberta Pool)
The Board of Directors of the Facility Association, for both industry and political reasons, deemed it
necessary to develop a mechanism that would depopulate the Facility Association. It was their wish
to develop a mechanism that would not require new legislation and could be tied to present
legislation in Alberta so that all Alberta insurers, brokers and agents would be required to participate
in the programme.
The Board developed amendments to the Plan of Operation of the Facility Association that would
create a risk sharing pool as a part of the Facility Association.
The present Facility Association Administration, including the Board of Directors, Officers &
Committees can administer the Alberta Pool.
For Private Passenger automobile, the Facility Association Market Availability Plan has three
components in Alberta: a Risk Sharing Pool, a Residual Market Segment and a Supplementary
Market Availability Plan.
Private Passenger risks that do not fall within the description of a Residual Market risk are not
permitted to be written by Facility Association Servicing Carriers. Agents and brokers are required
to place such risks with their voluntary markets. Such business is to be written as regular business by
the writing company, and issued at their normal rates. The writing company has the option of
keeping such business for their own account or transferring it to the Alberta Pool subject to the
appropriate transfer condition. If transferred to the Alberta Pool, this action must be invisible to the
consumer.
The Alberta Pool applies only to personal use, private passenger vehicles. Risks are written by
members at their normal premium levels, and transferred at 100%.
Members will share in the results of the Alberta Risk Sharing Pool in the proportion that the total of
its “voluntary private passenger non-fleet third party liability direct earned car years” not ceded to a
risk sharing pool is of the total of all “voluntary private passenger non-fleet third party liability direct
earned car years” not ceded to a risk sharing pool by all members for the province.
Members transfer limit in the Alberta Pool for grid risks is unlimited and for non-grid risks is 4% of
the previous year’s total voluntary private passenger non-fleet third party liability Direct Written Car
Years for such jurisdiction in the immediately preceding calendar year less the number of grid risk
private passenger non-fleet third party liability direct written car years ceded to the Alberta Risk
Sharing Pool by it in the same period.
The member shall be entitled as a result of the transfer of premium to an expense allowance in an
amount equal to a percentage of the written premium applicable to the transferred coverages, such
Effective October 1, 2004
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