What does Risk Distribution mean? Read on to discover the definition & meaning of the term Risk Distribution - to help you better understand the language used in insurance policies.
Used in tax deductibility discussions, the term mandates that enough independent risks of unrelated parties be pooled to invoke the actuarial law of large numbers. In tax disputes, the Internal Revenue Service (IRS) and numerous courts have required the presence of both risk shifting and risk distribution to find a financial arrangement to be "insurance."
We hope the you have a better understanding of the meaning of Risk Distribution.