| Under the IGP stop loss system, self-experienced parent companies, by agreeing to receive a reduced international dividend in years when experience is good, may elect to have their aggregate losses in years of unfavorable experience forgiven, that is, not carried forward to future years' experience. The amount used to reduce the dividend is effectively the stop loss charge, which is based upon the size and risk profile of the parent's pool. Thus, although the dividend paid to the parent is reduced in years of good experience; in years of unfavorable experience, the deficit, including the stop loss charge itself, is waived or forgiven.
There is no additional premium paid by either the subsidiary or by the parent. Premium amounts, benefits and policy terms and conditions of local contracts remain unchanged. Self-experienced parents with no current deficits being carried forward are eligible for stop loss subject to IGP underwriting review.
IGP's Small Groups Pool helps protect smaller, more volatile accounts from adverse claims fluctuations by combining the experience of participating companies to determine the overall surplus. If the client's own experience is positive and the overall experience of the pool is positive, an annual International Dividend is paid that is equal to the client's contribution to the International Account less a pro-rata share of deficits that arose elsewhere in the pool. Losses of an individual client within the Small Groups Pool are not carried forward to the client's account the following year.
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