Who provides insurance benefits in a Reciprocal Insurer setup?

• A. Board of Directors
• B. Attorney-in-Fact
• C. Insurance Agent
• D. Chief Executive Officer

Answer: (B)

In a Reciprocal Insurer setup, the entity that provides insurance benefits is the Attorney-in-Fact. A Reciprocal Insurer is a unique form of insurance organization where subscribers (policyholders) exchange insurance among themselves. This means that each subscriber agrees to pay their share of the costs for the claims that arise from the group.

The role of the Attorney-in-Fact is crucial because they manage the day-to-day operations of the Reciprocal Insurer, making decisions on behalf of the subscribers. They are typically appointed to act on behalf of the members and are responsible for handling the underwriting, claims processing, and overall administration of the insurance business. The Attorney-in-Fact essentially operates the insurer, ensuring that the benefits promised to subscribers are provided effectively and efficiently.

In contrast, while a Board of Directors may govern a traditional insurance company, in a reciprocal structure, the authority is delegated to the Attorney-in-Fact, reflecting the cooperative nature of the arrangement. Likewise, while an Insurance Agent facilitates the sale of insurance products and a Chief Executive Officer might oversee the operations of a typical corporation, these roles do not have the same direct responsibilities in the Reciprocal Insurer context as that of the Attorney-in-Fact.