Workers compensation premiums to skyrocket

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Reference no: EM131084696

Upon graduation, John Jones takes a position as risk manager to ABC Manufacturing which manufactures widgets that are utilized in farm equipment. Unfortunately, ABC Manufacturing has had a long history of significant injuries to its production employees which have caused the experience modification of ABC Manufacturing's workers compensation premiums to skyrocket. In fact, the premiums arc so high that ABC Manufacturing must now purchase its workers' compensation from the Iowa assigned risk workers' compensation pool. Briefly explain the significant of this market from a regulatory standpoint and explain the significance of an economic principle that is utilized in insurance but is not a requisite.

Reference no: EM131084696

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