MPC 03
MPC 03 :
Maximum Permissible Concentration. (OCD, Abbreviations and Definitions, 1971, 3) 85 The FSR adds a footnote that There is a limit, however, to addressing the adverse selection problem through pricing alone. As risk pools narrow to include only those presenting the highest risks, the actuarially appropriate premium may be so high that few will purchase the insurance. This may so increase the uncertainty about the expected loss from the risk pool that insurers become unable to price the risks correctly, or even become unwilling to provide any coverage at all. This is essentially why private insurers dropped out of covering flood risks) (p. 45)
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