What is a Reciprocal Insurer?

• A. A Corporation of Shareholders Providing Insurance
• B. An Unincorporated Association of Subscribers
• C. A Government Fund for Insurance Coverage
• D. An Established Insurance Company

Answer: (B)

A Reciprocal Insurer is defined as an unincorporated association of subscribers who exchange insurance agreements among themselves. In this arrangement, each subscriber (also known as a member) agrees to share the risks and losses of the other subscribers, creating a mutual insurance benefit. It operates on the principle of mutuality, where the subscribers contribute to a common fund from which claims are paid.

This structure allows an informal grouping of individuals or entities, working together to provide insurance coverage to each other without forming a traditional insurance corporation. The members, through their agreements, essentially pool their resources, which helps in spreading the risk associated with insuring their properties or liabilities.

The other options describe different types of organizations that do not fit the definition of a Reciprocal Insurer. A corporation of shareholders providing insurance would suggest a traditional stock insurance company. A government fund for insurance coverage indicates public sector involvement, typically seen in programs like state workers' compensation. An established insurance company usually refers to a formally incorporated entity subject to regulatory oversight, which again does not align with the characteristics of a Reciprocal Insurer.