A reciprocal insurer or reciprocal insurance exchange is a relatively uncommon form of insurance company that can combine features of both a mutual insurer and stock insurer. In this type of insurer subscribing members exchange contracts of indemnity with each other through an attorney-in-fact with each other. The attorney-in-fact issues policies and administer the operations of the exchange. The initial capital of the reciprocal exchange consists of the premium deposits of the subscribers and the subscribers’ agreement for to pay an additional premium assessment to maintain capital if needed. Some major reciprocal insurers are USAA, Farmers Group and the Erie Insurance Group.
About Owen Gallagher
Owen Gallagher is an experienced insurance litigator as well as a certified mediator and arbitrator who specializes in insurance industry disputes. His interest and affinity for insurance began at a young age working the counter at his father’s assigned risk agency in Roxbury. Over the course of his career, Owen has argued a number of cases in the Massachusetts Supreme Judicial Court and has helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth. Owen can be reached here.