Griffin maintains an appropriate level of funds, having regard to the likely exposure to claims, by underwriting the risk represented by each Member as equitably as possible.
The Managers recommend to the Directors of the Griffin Board each year the total estimated premium (“Call”) that is necessary to maintain funds to pay for anticipated claims, reinsurance costs and the administrative expenses of Griffin. It is then the responsibility of the Managers to achieve an equitable distribution of that cost between Members. The Managers ensure, when fixing each Member’s Call, that proper account is taken of the individual characteristics of each Member’s business, including claims record, business profile, approach to risk management and potential to bring claims.
As Griffin operates at cost, when policy years have a positive balance at maturity, surplus funds are applied for the benefit of its Members. They can be returned to Members or retained as part of the mutual's reserves. Griffin has already set aside reserves in excess of estimated claims with a view to avoiding the possibility of requiring any further contribution from the Members (a supplementary Call) should a policy year show a deficit at maturity.