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Compensation

The portion of claims eligible for pooling is entirely compensated from the annual pooling factors paid per certificate.

At the time of compensation, the annual pooling factor may be revised upwards to ensure full compensation of the amounts involved, or down, if appropriate.  Thus, the total amount claimed in excess of the pooling thresholds at the end of a year is equal to the total amount paid in compensation.  No surplus or deficit is created.

The volume of claims is distributed over the entire pooled population (that is, all certificates), based on a layered “pyramidal” compensation formula.  This prevents groups from having to absorb too large a volume of claims.