| This
type of company is one that has evolved over time into a
‘branded” image in the eyes of the public.
This is the opposite of what we have come to
know in today’s world as Health Maintenance (HMO) and
Preferred Provider Organizations (PPO).
A
traditional insurer selling health coverage may specialize in just
health coverage.
The types of insurance they sell may be
referred to as accident and health (A&H) or accident and
sickness (A&S) companies.
Most states require a separate license to
write life, health and property casualty.
Stock
and Mutual.
Not only can an insurance company be
categorized by the type of insurance, they can also be considered in
terms of its ownership as either a stock or mutual company.
Health
Insurance Quotes
Get Quotes for a variety of different health plans, including
individual and family, small group, short-term, student, Medicare
supplemental and dental plans.
At
the time of organization, a stock company sells stock to raise the
money necessary to operate a business.
The stockholders are not necessarily insured
by the company nor do policyholders necessarily own stock in the
company.
It is in business solely for the purpose of
selling insurance to policyholders.
On
the other hand, with a mutual company the policyholders are also owners
of the company and as such, can vote to elect the company management.
Any monies beyond the operating costs of the
company may be returned to the policyholders as dividends or reductions
in future premiums.
Consumer
Cooperatives. There
are two different types of cooperatives.
They are consumer cooperatives and producer
cooperatives.
Producer cooperatives include companies like
Blue Cross/Blue shield and some Health Maintenance Organizations which
we will discuss further on.
Additionally,
there are two types of consumer cooperatives.
One is the mutual insurance model discussed
previously and the other less common and unincorporated type is a
reciprocal company.
A
reciprocal company is based on the model of give and take.
Members agree to share insurance
responsibilities among all members.
All members insure one another and share in
the losses and no member can buy insurance without committing to
providing insurance in return.
This type of consumer cooperative is managed
by an attorney-in-fact who handles all matters of business for the
cooperative.
Participating
and Non-participating Policies.
These terms indicate that the policyholder of
a traditional type of insurance, either does or does not participate
in, or receive, a share of any surplus that results from an insurers
business operations.
These terms are also known as par and non-par.
The
surplus from which participating policyholders might receive a return
are excess reserves for claims, interest on investments and savings on
expenses.
This represents amounts not ear marked for any
particular purpose and are therefore available to participating policy
owners.
|
