P&CIllinoismedium
Under Article V of the Illinois Insurance Code, a reciprocal insurer is best described as:
An unincorporated association of subscribers who exchange contracts of indemnity through an attorney-in-fact
BA stock insurance company owned by shareholders
CA mutual insurance company owned by policyholders with elected directors
DA government-sponsored insurance entity created by the General Assembly
Why this is the answer
Article V of the Illinois Insurance Code authorizes reciprocal or interinsurance exchanges. A reciprocal is an unincorporated association of subscribers — individuals, partnerships, or entities — who agree to indemnify each other against specified losses. Coverage is administered by an attorney-in-fact who is granted a power of attorney by each subscriber to handle policy issuance, underwriting, claims, and surplus management. Famous examples include Farmers Insurance Exchange and USAA's reciprocal exchange.
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