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Stock Insurance Company
Stock insurance companies are owned by stockholders who purchase shares of stock as an investment. If profitable, stock insurance companies may pay dividends to their stockholders.
Mutual Insurance Company
Mutual insurance companies are owned by their policy owners. A mutual company has no stockholders. Dividends are paid to policy owners.
Many mutual insurance companies operate over large areas of the country or even nationally. Some, however, operate in only a limited geographic area. Traditionally, county mutuals soldproperty insurance in only one county or one limited geographic area of a particular state, and specialized in farm insurance. Many of these companies now write more lines of insurance in broader geographical regions.
Is an unincorporated group of persons or organizations that exchange risks for the purpose of paying the cost of retained losses and purchasing reinsurance. A reciprocal is managed by an attorney-in-fact.
Fraternal Benefit Societies
A fraternal benefit society is an organization of people who usually share a common ethnic, religious, or vocational affiliation. This type of society may provide insurance to its members. Fraternal insurers are primarily life insurance providers, and many are church related.
Are groups of insurers that mainly write fire insurance and auto physical damage insurance. A Lloyd's association's financial strength depends on the financial strength of its individual members. A member can be either a person or a company, and each member's liability is limited. Lloyd's associations play a relatively small role in the U.S. insurance market, and most of them are based in Texas.
Self Insurance Group
- Self-insurers are usually large companies that are willing and financially able to retain certain risks and to self-fund for that purpose. Through a formal program of some kind, they set aside funds to pay claims as well as the administrative costs of running an internal insurance program.
- Sometimes smaller companies formally band together to form a self-insurance group through which they provide workers compensation benefits to injured employees. Each group is a "shared-risk" pool, and members of the group are responsible for each other's losses. If the self-insured group has a poor year, group members could be charged an assessment.
Captive Insurance Companies
An insurance company that has as its primary purpose the financing of the risks of its owners or participants. Typically licensed under special purpose insurance laws and operated under a different regulatory system than commercial insurers. The captive provides insurance to sophisticated insureds that require less policyholder protection than the general public.
Risk Retention Groups
Risk retention groups are insurers that issue liability policies to their members and cover their members' risks. The Risk Retention Act of 1986 authorized the formation of these groups.
Authorized by the Risk Retention Act of 1986, a group formed to obtain liability coverage for its members, all of which must have similar or related exposures.
An insurer that sells insurance to the public (a primary insurer) enters into an agreement with another insurance company to accept some of its risk by paying a premium for coverage.
Private insurance includes all forms of insurance provided by privately owned insurers.
Exist because the risks are not ideal for private companies to insure.
Federal Insurance includes:
SSI, Medicare, National Flood Insurance Program, crop insurance, and the FDIC.
State Insurance includes:
workers compensation, unemployment insurance, and state-run medical insurance plans.
An admitted insurer is a company that is licensed to do business in the state or country in which the insured exposure is located.
An insurance company that is not licensed to do business in a certain state. A consumer is legally permitted to buy property and liability insurance from a nonadmitted insurer when coverage is not available from an admitted insurer. This type of coverage is referred to as excess insurance and surplus lines insurance.
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