Properly managed self-funded risk pools make allowances for unexpected loss either through proper reserving or through contractual obligations of pool members bearing risk.
In the later case, although member’s obligations are memorialized contractually, few, it seems, understand the significance. When loses exceed revenue and reserves a cash call is made on a pro-rata share basis among risk pool members.
Now we hear (based on second hand information and unverified hear say) that is the unfortunate experience of a small, 35 employee Texas school district. “Sorry, but you owe a $100,000 levy as per the terms of your membership agreement”.
Could this be true? We hope not.
