Reciprocal Insurance Exchange Law and Legal Definition

An unincorporated group of individuals, firms or corporations or entities who are commonly termed as subscribers or members, mutually agree to exchange contracts of insurance or insurance policies and share their insurance risks among themselves within their select group. Each insured subscriber or member of a reciprocal exchange individually appoints and authorizes a common attorney-in-fact, the chief administrator to manage the affairs of the exchange. The attorney-in-fact manages the reciprocals finances and deals with underwriting, claims administration, investments and administer the day to day operations. The attorney-in-fact gains a percentage of total profits for their service.