Lessons from cases
We studied 5 historical cases and 6 groups of recent ones. Each was analysed the same way: mechanism, financial result, how it handled adverse selection and moral hazard, why it succeeded or failed, and what it means for the simulation's parameters.
Overall conclusions
- "Voluntary, unsubsidised, no reserves" has never been stable. Ant Group's Xianghubao, some city health plans in China, the 19th-century British Friendly Societies and large rotating savings clubs all show it.
- High participation appears only with compulsion or administrative push — Singapore's CPF, Rwanda, the early Zhejiang city health plans.
- Voluntary schemes that last share three traits: a strong community filter, reserves or a capital rule, and large risks passed on to someone else.
- Lending between pools fails in two ways: without booking or repayment (China's empty personal accounts), or when long-term liabilities eat a short-term pool (Friendly Societies).
- We found no voluntary mutual fund for education. The education pool is the gap this study addresses.
Historical cases
| Case | Membership | Outcome | Lesson for this study |
|---|---|---|---|
| Singapore CPF | Mandatory | About 70 years in operation | Personal accounts can last; but the government pays for the interest floor, which cannot be copied |
| China's pooled + personal pensions | Mandatory for employees, voluntary for residents | Broad coverage; about 2.22 trillion yuan of empty personal accounts (2011, secondary source) | Loans between pools must be booked, bear interest and be repaid |
| China's rural cooperative medical schemes | Close to mandatory in the collective era | Collapsed in the 1980s with the collective economy | The funding source vanished; their governance rules still apply: county level, household membership, focus on serious illness |
| British Friendly Societies | Voluntary | Deficits were common; absorbed by national insurance | As members lived longer, sickness pay turned into pensions; the pension pool must not be lent dry |
| Rotating savings clubs (hehui, biaohui) | Voluntary | Small clubs stable, large ones collapsed | Clubs feeding other clubs and promised returns above real returns cause chain defaults; the last to collect carries the most risk |
Recent cases
| Case | Membership | Outcome | Lesson for this study |
|---|---|---|---|
| Ant Group's Xianghubao | Voluntary | Peak about 100 million members; closed 2022 | Exit reacts to cost with a threshold: a 59% rise in 2020 cost about 4% of members, a 45% rise in 2021 about 23% |
| China's city health plans (Huiminbao) | Voluntary, some administrative push | About 20–30% do not renew each year | Without the push, those who stay are the higher risks |
| US Health Care Sharing Ministries | Voluntary, religious communities | Old ones stable, some failed | Administration reached 40% of contributions in one case; caps, audits and disclosure must be written down |
| Rwanda's community health insurance | Mandatory plus subsidy | Coverage above 80%, contributions still below costs | Voluntary schemes rarely grow large |
| India's SEWA | Voluntary | About 100,000 members for years | Claims fell from 177% to 68% of premiums over about 3 years: corrections act with a lag |
| On-chain and peer-to-peer mutuals | Voluntary | Nexus Mutual freezes withdrawals when capital is below 100% | Paying leavers in instalments when solvency is short survives a run |
| Germany's Samarita | Voluntary, board approval | About 300 members, recognised in law | 50% personal + 50% solidarity, large claims reinsured — the closest structure to this study |
| China's private pension accounts | Voluntary | Only 22–31% of account holders actually contribute | Being registered and paying are different states |
| China's rural credit cooperatives | Voluntary shares | Misappropriation in unlicensed ones | Custody and external audit belong in the charter |
Lessons written into the rules
- Loans between pools are booked, bear interest and are repaid; the pension pool keeps a reserve floor (pooled pensions, Friendly Societies).
- New members wait before drawing; rejoining restarts the wait (Xianghubao).
- Leavers are paid over 3 years when solvency is short (Nexus Mutual).
- Automatic adjustment takes effect after a 2–3 year lag (SEWA).
- An administration cap, a custodian, an external audit and public disclosure (HCSM, rural credit cooperatives).
- No guaranteed interest rate (the CPF floor is paid by the government).