In an assigned risk plan, the total business assigned to each licensed insurer is proportional to what?

• A. The amount of premiums paid by a single insured
• B. The number of policies written by the insurer
• C. The insurer's share of the voluntary workers' compensation market
• D. The insurer's capital and surplus

Answer: (C)

Assigned risk plans allocate remaining hard-to-insure workers’ compensation business based on each insurer’s share of the voluntary market. This means an insurer that writes a larger portion of the voluntary market takes on a larger portion of the residual risk, aligning assignment with overall market capacity and underwriting experience. It isn’t determined by what a single insured pays in premiums, the number of policies the insurer writes, or the insurer’s capital and surplus. Those factors don’t reflect the insurer’s overall role in the voluntary market, whereas market share shows relative presence and capacity to absorb more risk.