Editing Insurance (section)

===Insurance financing vehicles===
* Fraternal insurance is provided on a cooperative basis by [[Benefit society|fraternal benefit societies]] or other social organizations.<ref>Margaret E. Lynch, Editor, "Health Insurance Terminology", Health Insurance Association of America, 1992, {{ISBN|1-879143-13-5}}</ref>
* [[No-fault insurance]] is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
* Protected self-insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information.
* Retrospectively rated insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
* Formal [[self-insurance]] (active risk retention) is the deliberate decision to pay for otherwise insurable losses out of one's own money.<ref>{{cite book |last1=Lencsis |first1=Peter M. |title=Workers compensation : a reference and guide |date=1998 |publisher=Quorum Books |location=Westport, Connecticut |isbn=9781567201741 |pages=75–76 |url=https://archive.org/details/workerscompensat00lenc/page/75/mode/2up |access-date=30 December 2020}}</ref> This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self-insurance is usually used to pay for high-frequency, low-severity losses.<ref name="Teale2013">{{Cite book|last=Teale|first=John|title=Insurance and Risk Management|publisher=CCH/Wolters Kluwer|year=2013|isbn=978-1-922042-88-0|location=Sydney, Australia|pages=40|quote=Risk retention occurs when an individual or business firm retains all or part of a given risk. Risk retention is generally appropriate when the frequency of loss is low and its severity is low. Risk retention can also be appropriate for high-frequency, low-severity risks where potential losses are of low value. Risk retention can be either active or passive. Active risk retention refers to the situation where an individual recognises the risk and deliberately elects to retain all or part of that risk. This may be achieved by a firm or individual electing to carry the first $500 of any loss as a policy excess (or deductible). An excess (or deductible) is a provision in the policy whereby a specified amount is deducted from the loss payment otherwise payable to the insured. Alternatively, the risk manager may decide to self-insure the entire risk thereby saving what they would have paid as an insurance premium. Active risk retention is used because a policy excess will eliminate small policy claims and the administrative expense of adjusting these claims resulting in reduced premiums. It is also used where insurance is either unavailable or too expensive.}}</ref> Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords.<ref name="Teale2013"/>
* [[Reinsurance]] is a type of insurance purchased by insurance companies or self-insured employers to protect against unexpected losses. [[Financial reinsurance]] is a form of reinsurance that is primarily used for capital management rather than to transfer insurance risk.
* [[Social insurance]] can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that requires participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if they need to. Along the way, this inevitably becomes related to other concepts such as the justice system and the [[welfare state]]. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):
**[[National Insurance]]
** [[Social safety net]]
** [[Social security]]
** [[Social Security debate (United States)]]
** [[Social Security (United States)]]
** [[Social welfare provision]]
* [[Stop-loss insurance]] provides protection against catastrophic or unpredictable losses. It is purchased by organizations who do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.