The final risk-sharing component of the SRA is the “net book quota share,” defined as the proportion of a company’s overall gain or loss over its entire “book of business” that is ceded to the government after all other reinsurance provisions in the SRA have been applied. Under the SRA, companies must cede a share of their cumulative underwriting gains/losses to the government. During years in which there are underwriting gains, of this share is distributed back to companies that sell and service policyholders in 17 underserved states. Through the net book quota share, the government receives a.
