Insurance Companies

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Definitions

Insurance Company
An organization that has been chartered by a governmental entity to transact the business of insurance.

Assessment mutual insurance company
A mutual insurer with the right to assess policyholders additional amounts of premium to meet operational needs.

Farm mutual insurer
A mutual insurer formed by farmers to insure fire, hail and other casualty losses to farm property, stock and rural buildings.

Insurance exchange
An insurance marketplace or organization patterned after Lloyd’s of London, formed during the 1980s in New York City, Miami, Florida, and Chicago, Illinois. Exchanges were formed to write large or unique risks, generally on a surplus lines basis, and to write reinsurance business. Both the New York and Florida exchanges have suspended operations.

Lloyd’s of London
The centuries-old insurance exchange that traces its beginnings to Lloyd’s Coffee House in London. It provides insurance and reinsurance coverages through underwriting syndicates. The syndicates, a form of insurance company, are funded by individual members (or “names”) and insurance companies (corporate capital).  The Names and Corporate members independently assume a proportionate part of the losses. The liability of the names is unlimited. The syndicates are managed by general managers who have underwriters on their staffs.

Mutual insurance company
An insurance company that has no capital stock, but is owned by its policyholders, who elect a board of directors or trustees through whom business is conducted. Any earnings belong to the policyholders and may be distributed to them as policy dividends or reduced premiums.

Reciprocal insurance exchange
An insurance market of reciprocal agreements of indemnity among persons known as subscribers. The exchange is effected through an attorney-in-fact common to all persons. Subscribers agree to become liable for their share of losses and expenses incurred among all subscribers and authorize the attorney-in-fact to exchange insurance with the other subscribers, pay losses, invest premiums, recruit new members, underwrite new business, receive premiums and effect contracts of reinsurance.

Stock insurance company
An insurance company formed as a corporation that is owned and controlled by stockholders, usually for profit. Initial capital is contributed by stockholders, to whom profits are distributed as dividends. Policies are issued at a fixed cost, and should losses exceed premiums received, the stockholders’ investment and equity must make up the difference.

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Insurance for Insurance Companies

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Insurance Companies Operating In Canada

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