Ø Pooling
of risk is one of the fundamental principles of insurance there the company
pools the premium collected from several individuals to insure them against
similar risk.
Ø Separate
pools are maintained by insurance company for different risks.
Ø The
pool account for one risk can be used to settle the claim of another type of risk
Ø The
premium collected from the individuals is deposited in the pool accounts and
claims are paid out of this pool.
Ø Premium
charged should be sufficient be sufficient to meet the claim payments &
administrative and other expenses for maintaining the pool.
