Abstract
Innovative practices are not often associated with local authorities, and certainly not very small public bodies (villages, schools, towns), but in the USA the success of local government self-insurance pools flies in the face of that notion. Over 75,000 (out of a total of 84,000) local bodies have come to participate in pools and—indeed—they were collectively/collaboratively responsible for their creation. Starting in 1974, these pools have provided risk financing across most traditional lines of insurance—property, liability, life, and a range of specialty lines. In fact, reinsurance pools have also emerged; pools of pools it might be said. Perhaps most significantly, many of these pools have extended their activities well beyond risk financing and have become what might be called risk management pools. As such, the real innovation may not just be seen in providing a myriad of risk coverages to small public bodies but to providing relatively advanced risk management programs to thousands of these bodies; bodies that otherwise simply would not have the capacity to take on these activities themselves. In achieving this range of sophistication, the case is easily made that pooling is the most important example of public sector innovation in USA local governments.