Types of Insurers
Government insurers examples; Workers’ Compensation board, Provincial medical plans, Unemployment insurance plan, Automobile insurance plans in some provinces and certain types of coverages relating to trade and export.
Private industry has many different types of insurers:
- Captive insurance companies – insurance companies set up by the insured. Fronting is an arrangement where one insurer gets paid a fee for allowing another insurer to use its name.
- Co-operative organizations – owned by its members, true co-op’s are rare today. More common is mutual companies which are owned by the policyholders. There are four types of mutual companies; assessment mutuals, stock mutuals, co-operative stock mutuals and factory mutuals.
- Reciprocal insurance exchanges – are owned by a group of insured’s, similar to a captive insurance company. The exchange is based solely on the reciprocal agreement between members.
- Stock companies – are owned by the shareholders and run by a board of directors. Insured pay a fixed premium to cover losses and expenses if funds are not sufficient the money is taken from investment income. Sources of revenue are; underwriting gains and investment income.
- Insurance Pools – owned by a group of insurers to insure risks no insurer will take on individually. Examples are: Nuclear Insurance Association of Canada (NIAC) and the Pollution Liability Association.
