What is a public entity risk pool?

The concept is called a pool because a group of organizations join together to pool their resources and risks. MPR is more specifically a public entity risk pool because the term “organizations”, in our case, refers to public entities such as (but not limited to) counties, cities, and even school districts. Organizations are better known as Members. A public entity risk pool may also be referred to as an intergovernmental risk pool or a public sector risk pool.

A public entity risk pool is owned and governed by its Members. Members elect a board of directors to set the course for the pool’s goals. Many pools, such as MPR, have a full-time staff to run the day-to-day operations. Additionally, public entity risk pools are not-for-profit; therefore a major goal is always to reduce risk, which in turn reduces cost. Public entity risk pools are able to offer more stable rates due to the spread of risk and economies of scale.

Risk pools began in the late 70’s, through state legislature, and since then the industry has made great strides in regulation. The Association of Governmental Risk Pools (AGRiP) for example, establishes a model of professional standards. The Government Accounting Standards Board (GASB) provides the foundation for accounting and financial standards.

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