A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity.
For example, the United States imposes an import quota on cars from Japan. The Japanese government may see fit to impose a quota share program to determine the amount of cars each Japanese car manufacturer may export to the United States. Any extra amount that a manufacturer wishes to export must be negotiated with another manufacturer that did not or cannot maximize its share of the quota.
Also there are quota share insurance programs. Where the benefit and the premiums are divided proportionally among the insured. For example, three companies take out a $1,000,000 fire insurance policy on a quota share basis with company A assuming 50% ($500,000), company B 30% ($300,000), and company C 20% ($200,000). If the annual premium was $5,000, company A would receive $2,500 in premium, B would receive $1,500, and C would receive $1,000.
Famous quotes containing the words quota and/or share:
“Some are petitioning the State to dissolve the Union, to disregard the requisitions of the President. Why do they not dissolve it themselves,—the union between themselves and the State,—and refuse to pay their quota into its treasury? Do not they stand in the same relation to the State that the State does to the Union? And have not the same reasons prevented the State from resisting the Union which have prevented them from resisting the State?”
—Henry David Thoreau (1817–1862)
“Even under the most perfect Social Democracy we should, without Communism, still be living like hogs, except that each hog would get his fair share of grub.... Whilst we are hogs, let us at least be well-fed, healthy, reciprocally useful hogs, instead of—well, instead of the sort we are at present.”
—George Bernard Shaw (1856–1950)