Types of Insurers
There are a few types of insurers. The following is a list of these types and how they operate: Stock companies, in which stock holders provide the money for the company and receive profits based on the success of the company; Mutual companies, in which there are no stockholders, but capital is provided by an individual or group, who elect a board of directors and receive dividends from the company; Fraternal benefit societies, which are non-profit organizations that give health insurance to their members; Reciprocals, which are associations of policy holders who insure each other; Lloyd’s associations, which are a group of individuals and companies that underwrite insurance for their accounts as well as provide specialized coverage, but the members are grouped in syndicates that are responsible for their own contracts; Surplus/excess lines, which is when an insurer gives high-risk coverage by acting as a liason for a carrier in another state; and finally Risk Retension groups, which is a form of self insurance, in which businesses set aside some money to help them in case they need to pay for a claim in the future.
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Last updated: 12/15/2017
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