Insurance Handbook - Alaska Department of Community and ...

Insurance Topics Updates at www.iii.org/issues_updates
Residual Auto Insurance Markets
by the voluntary market, thus eliminating the need for assigned risk plans. In
states without a competitive fund, insurers may be assigned applicants based on
their market share and service those employers as they would employers that
came to them through the voluntary market, through a system known as direct
assignment. They may also participate in the residual market through a reinsurance
pooling arrangement.
Second Injury Funds: Second injury funds were created to encourage businesses
to hire workers who are physically handicapped by congenital defects or the
residual effects of an accident or illness but due to other laws that now protect
the physically handicapped worker, such as the Americans With Disabilities Act,
some states are disbanding their fund.
Second injury funds receive money from insurance companies and employers
as well as from legislative appropriations. Insurance company payments may
be based on a percentage of total compensation paid, premiums collected or the
nature of the specific injury. The second injury funds may be administered by
the state Workers Compensation Commission, Industrial Board or Department
of Labor.
68 I.I.I. Insurance Handbook www.iii.org/insurancehandbook