There are three basic ways in which MIU can be reinsured:
- Pooled reinsurance — MIUs join together in a relationship that links them only through the pool. There is typically some form of standardization across the pool to ensure transparency and avoid one scheme profiting at the expense of another. The more heterogeneous the MIUs the better the pool advantage, and the more regionally dispersed, the lesser risk of fluctuation due to epidemic or natural disaster. Pooling enables better use of reserves.
- Reciprocity also enables a better use of reserves, but in this case the MIUs are known to one another and probably have other ties and commonalities.
- Subsidies from government or donors — this may sustain the MIU, but may also send inappropriate signals to the key players. The lessons from previous insurance experience indicates that subsidies can worsen or alleviate market failure depending on where into the system they are paid, that there may not be a perfect method to subsidise, and no matter how well run an MIU subsidy may be essential in the long run due to the gap.