Subscription Policy

Published: | Updated: August 21, 2016

Definition - What does Subscription Policy mean?

A subscription policy is an insurance policy in which multiple insurers share the risk associated with providing the insurance. It is called a subscription policy because the insurers participate in the policy by "subscribing" to it. In other words, insurers can choose whether or not they would like to join in the offering of the particular policy.

Insuranceopedia explains Subscription Policy

In subscription policies, the risk associated with the policy can be divided equally between the two policies, or it can be distributed more to one insurer and less to the other or others. The subscription policy must state the amount of risk that each insurer is responsible in assuming. The benefit of subscription policies is that they allow insurers to receive premiums for a policy without having to assume the entire risk. So, the individual insurer can take on however much risk it is beneficial for it to assume.

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