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Provisions that expressly create actual or notional accounts that accrue actual or notional interest suggest that the compact contains, in fact, a deposit. |
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By creating a "security blanket" for its insureds, an health plan company may inadvertently find that its insureds may not be as risk-averse as they might otherwise be (since, by definition, the insured deadbeat transferred the risk to the insurer). This problem is known Group Health Insurance to the insurance management as moral hazard. To reduce their own financial exposure, insurance companies have contractual clauses that mitigate their obligation to provide coverage if the insured engages in behavior that grossly magnifies their risk of loss or liability.