Which of the following would lead to treating a contribution to a public-entity risk pool as a deposit?

Treating a contribution to a public-entity risk pool as a deposit occurs when there is no pooling or transfer of risk. In this context, a deposit signifies that the funds contributed do not represent a shared financial responsibility for risk among the participants. Instead, the participants maintain their own individual risk and do not engage in the collective risk-sharing arrangement that characterizes a public-entity risk pool.

This is particularly relevant in situations where the contributions are deemed more as prepayments or retainers which can be returned to the contributors, emphasizing the nature of the transaction as a simple deposit rather than a commitment to participate in a risk-sharing pool where losses or claims are distributed among all participants. In such a case, the financial arrangement resembles a deposit rather than a contribution to a shared risk fund.

The concept of pooling risk entails a collective approach where the financial contributions are used to cover potential losses experienced by the group. Therefore, without this pooling or transfer of risk, the funds contributed are handled differently and recognized as a deposit rather than as part of a risk-sharing scheme.