Insurance Broker Certification Practice Exam 2025 – All-in-One Study Resource

A Reciprocal Insurance Company is unique in that it is owned by its policyholders, who are referred to as "subscribers." This structure requires a specific party to manage the operations of the company, which is the role of the Attorney in Fact. The Attorney in Fact serves as the manager and has the authority to handle the day-to-day operations and make decisions on behalf of the subscribers. This includes underwriting policies, collecting premiums, and paying claims.

The role of the Attorney in Fact is crucial because it allows for the effective management of the reciprocal's business without the need for direct involvement from all the subscribers, facilitating a smoother operation. This appointed individual or organization acts in the best interests of the subscribers, ensuring that the reciprocal operates efficiently and meets regulatory requirements.

Other leadership roles, such as the Board of Directors, CEO, or CFO, are not typically in charge of managing the Reciprocal Insurance Company directly; their functions may involve strategic direction, financial oversight, and governance, but the Attorney in Fact is the one specifically entrusted with the administration and operational aspects of the company.