With self-funding, the premiums paid by members are used to pay claims. Therefore, the pool's members underwrite the risks. The premiums paid by member districts are invested conservatively, and interest gained remains as member equity.
Members pay rates that reflect their loss experience.
The rates are actuarially determined to ensure adequate contributions are made to cover potential losses. A self-funded pool exists to assist its membership in times of trouble, not to protect its bottom line of profit. This results in a partnership to return a member to its pre-loss condition quickly, fairly and expediently. Best of all, when a pool is properly managed and administered, surplus can result.