Types of Insurers - Insurance Companies or Carriers
Reciprocal Insurance Company
1. A group-owned insurer whose main activity is risk sharing. 2. A reciprocal insurer is unincorporated, and is formed by individuals, firms, and business corporations that exchange insurance on one another. Each member is known as a subscriber. 3. Each subscriber assumes a part of the risk of all other subscribers. If premiums collected are insufficient to pay losses, an assessment of additional premium can be made. 4. The exchange of insurance is affected through an Attorney-In-Fact.
Self-Insurer
To self-insure means to assume the financial risk one's self. This is generally an option only for large companies who may even reinsure for risks above certain maximum limits.
Risk Retention Groups (RRG)
1. A group-owned insurer that primarily assumes and spreads the liability related risks of its members. 2. Licensed in at least one state and may insure members of the group in other states. 3. Owned by its policyholders. 4. Group must be made up of a large number of homogenous or similar units. 5. Membership is limited to risks with similar liability exposures such as theme parks, go cart tracks, or water slides. 6. Must have sufficient liquid assets to meet loss obligations. 7. Each member assumes a portion of the risks insured.
Fraternal Benefits Societies
1. Are primarily social organizations that engage in charitable and 'benevolent activities that provide life and health insurance to their members. 2. Membership typically consists of members of a given faith, lodge, order, or society. 3. They are usually organized on a non-profit basis.
Mutual Insurance Company
1. Is owned by policy holders (who may be referred to as members). 2. A Boats of Trustees or Directors directs the company operations and is elected by policyholders. 3. Policyholders receive non-taxable dividends as a return of unused premium when declared by the directors. 4. Dividends are NOT guaranteed. 5. Traditionally, mutual insurers issue Participating policies.
Stock insurance Company
1. A stock company is owned by stockholders or shareholders. 2. Directors and officers dirext the company operations and are elwxted by stockholders. 3. Stockholders recieve taxable corporate dividends as a return or profit when declared by the Directors. 4. Dividends are not guaranteed. 5. Traditioanlly stock insurers issue Non-Participatinf policies.
Lloyds of London
1. Is NOT an insurance company, but consists of groups of underwriters called Syndicates, each of which specializes in insuring a particular type of risk. 2. Lloyds provides a meeting place and clerical services for syndicate members who actually transact the business of insurance. 3. Members are individually liable for each risk they assume. 4. Coverage provided is underwritten by a syndicate manager such as an attorney-in-fact or individual proprietor.
