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That means State Farm paid out $1.25 in claims for every $1 of premium collected.
A substantial portion of the premium collected is used for inspection services rather than loss protection.
Of course, like any insurance program, the economic success of the service rests on the size of those claims and the amount of premium collected.
Senator Schumer pointed out in a statement in February that the insurers profit from generous fees that can add up to as much as a third or two-thirds of the premium collected in a given year.
In the large-group market serving employers with many employees, the load factor tended to range from 15 to 30 percent, corresponding to a ratio of health benefits paid for a premium collected (known as the medical loss ratio) of 75 to 85 percent.
The goal here is for the sold put to expire worthless, allowing the seller to pocket the premium collected when the trade was initiated.
Similar(50)
Since 1999, the premiums collected by state pools have quadrupled, to $1.2 billion.
And the guarantor's insurance fund would be made up of premiums collected from borrowers.
States have also found that they can impose modest taxes on the premiums collected by captives.
The rules, intended to benefit consumers, vastly expand federal authority to direct the use of premiums collected by companies like Aetna, Humana, UnitedHealth and WellPoint.
The industrial insurance market consists of individual contracts sold in small amounts with premiums collected weekly or monthly at the policyholder's home.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com