Since OTARMA began, there have been many questions regarding the operations of insurance pooling versus
traditional insurance. The following are some of the questions we typically encounter:
Q. What is a pool?
A. A Pool is a cooperative arrangement with several similarities to
traditional insurance. In the case of OTARMA, participating Ohio Townships pay a premium, receive coverage and make claims. In addition, these Members rely on the OTARMA Pool for assistance with overall risk management and loss control.
Q. Why did OTARMA begin?
A. OTARMA began because so many OTA Members were unhappy with their insurance programs and sought alternative methods
of insuring their townships. (Traditional insurers were single purposed and extremely inflexible.)
Q. How could OTARMA provide specialty coverages to Ohio Townships when traditional insurers would not?
A. Because of the structure of OTARMA, the Membership is insulated from the factors that have historically caused the extreme variances in insurance company pricing and coverage availability. OTARMA
provides coverage for only one class or risk - townships, and in one geographical area - Ohio. This translates into more predictable claims payment patterns and therefore the ability of OTARMA to provide stable pricing and broad coverage.
Q. What type of coverages does this pool offer?
A. OTARMA offers commercial general liability, police professional, public officials liability (errors and omissions), commercial automobile, property and inland marine.
Q. Is there a firm that independently analyzes OTARMA and other intergovernmental pools' financial stability?
A. Yes, Demotech, Inc. specializes in providing a broad set of management consulting services related to
financial stability analysis. These specialty ratings are accepted by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). OTARMA consistently receives the highest ratings in
all four areas of performance:
Financial Stability - AAA
Loss Reserve Opinion - AAA
Administration - AAA
Overall Performance - AAA
Q. What is reinsurance?
A. Reinsurance is a method by which OTARMA protects itself from unexpected losses. The reinsurance utilized by OTARMA is unique in that it protects OTARMA not only
from a single catastrophic loss but also from a series of losses that might exhaust its financial resources.
Q. Is OTARMA an assessable pool?
A. No. OTARMA does not require its Membership to be jointly responsible for the liabilities of other Members.
Q. How does joining the OTARMA Pool save money?
A.
•OTARMA does not operate under a "for profit" motive and is tax-exempt.
•OTARMA has a much lower overhead.
•The OTARMA Membership retains the investment income.
•Improved loss control which translates into reduced claims.