GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Reciprocal Insurance Exchange


Synonyms:insurance reciprocal, reciprocal inter-insurance exchange, unincorporated reciprocal inter-insurance exchange
Filed Under: financial-banking, insurance
Tags: banking, insurance
 

Definition of reciprocal insurance exchange

reciprocal insurance exchange
1. An unincorporated association comprised of individuals, firms and corporations where each participating entity mutually insures and is in turn insured by other members. A reciprocal insurance exchange is administered by an attorney-in-fact, and members share profits and loss directly in proportion to the amount of insurance they purchase or provide.

Related Terms and Acronyms:

  • credit union (CU)   A non-profit, cooperative financial institution owned and controlled by the people who use its services, usually a group such as employees in the same company or industry. Credit unions historically have been able to offer lower rates and fees and still operate in the black. Credit unions rely on a financial reserve to absorb unexpected losses from loan defaults or other financial setbacks, and the majority of credit unions carry federal deposit insurance that protects individual accounts up to a specified amount in the event the credit union fails.
      ➥  Credit unions are member-owned, full service co-operative financial institutions.
  • exposure   How much liability an insurer takes on when they write an insurance policy.
  • insurance (insur)   An arrangement where one party provides financial protection to another party for specific damages or losses.
  • liability   A situation where one party is found to be legally responsible for something.
  • mutual insurance company   An insurance company where the each policyholder is a part owner of the company.
  • peril   Anything that poses a risk of loss, which may or may not be insurable depending on the potential for risk.
  • reinsurance   The process of one insurance company sharing liabilities from an insurance policy with another insurance company in order to lessen exposure, or in other words, insurance for insurers.
  • self insurance   Setting aside money or assets for a potential future loss.
  • underwriters association   A group of underwriters in a specific field who join together to maintain professional standards.

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