What does assessment insurers refer to in health insurance?

Prepare for the Virginia Health Insurance Exam. Utilize flashcards and multiple choice questions, each with hints and explanations, to boost your knowledge. Get exam-ready today!

In health insurance, the term "assessment insurers" refers specifically to the practice where insurers collect additional premiums from policyholders, commonly referred to as assessments, when the claims or losses exceed expectations or when the funds available in the pool are insufficient to cover those losses. This is often seen in mutual insurance companies or entities that operate on a cooperative model, where the financial health of the insurance pool directly impacts the premiums assessed to policyholders.

When insurers determine that there have been higher-than-expected losses, they may levy assessments as a way to recoup those losses and maintain the stability of the insurance fund. This means that policyholders may be charged additional amounts based on the losses incurred, rather than relying solely on fixed premium amounts. Thus, option D effectively captures the essence of how assessment insurers function within the health insurance landscape, linking the collections of premiums to the actual occurrences of claims or losses.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy