Intergovernmental risk pools (IRPs) operate under the same general principle, except that they are made up of public entities, such as government agencies, school districts, county governments and municipalities. Thus, IRPs provide alternative risk financing and
transfer mechanisms to their members through self-funding, where particular types of risk are underwritten with contributions (premiums), with losses and expenses shared in agreed ratios. In other words, Intergovernmental Risk Pools are a cooperative group of governmental entities joining together through written agreement to finance an exposure, liability or risk. Although they are not considered insurance, these pools extend nearly identical coverage through similar underwriting and claim activities, as well as provide other risk management services. Pools have many advantages over insurers for their members. Pools tend to protect their members from cyclic insurance rates, offer loss prevention services, offer savings (as they are non-profit organizations and do not lose funds through broker fees), and have focus and expertise in governmental entities often not found in insurers.
Intergovernmental risk pools may include, but are not limited to, authorities,
joint power authorities, associations, agencies, trusts, risk management funds, and other risk pools.