1.5.4 Reciprocal Insurers
Like mutual insurance companies, reciprocal insurers are owned by the company's policyholders. In a reciprocal insurer structure, each policyholder insures the risks of the other policyholders (reciprocity).
If one subscriber incurs a loss, an equal portion of the loss is distributed among each individual subscriber.
Reciprocals are managed by an attorney-in-fact. An attorney-in-fact is a person who holds a power of attorney and therefore is legally designated to transact business and execute documents on behalf of another person. The attorney-in-fact's power and responsibilities depend on the specific powers granted in the power of attorney document. An attorney-in-fact is an agent of the principal.
