tracts that are close to one another are not independent, those that are far apart are approximately independent, then the average return from all contracts is equal to its expected value with probability one. Thus, an insurance company that holds a large number of health policies should be risk-neutral, even though the fact that propinquity carries illness implies that not all insured risks are independent. Some risks that cannot be diversified; i.e., the risk of nuclear war (or of a flood or a plague) cannot be spread by appeal to the law of large numbers. Our model applies to diversifiable risks. This class of risks is considerably larger than the independent ones.