Who typically manages the operations of a reciprocal insurance company?

In a reciprocal insurance company, the operations are typically managed by a designated attorney-in-fact. This arrangement allows for a more streamlined decision-making process as the attorney-in-fact is authorized to act on behalf of all the subscribers (members) within the reciprocal. Each member essentially forms a pool and agrees to share risks and resources. The attorney-in-fact handles the operational aspects, including underwriting, claims management, and other administrative functions, ensuring that the collective interests of the subscribers are managed effectively.

This structure supports the principle of mutuality that underpins reciprocal insurance, where members share in both the risks and the responsibilities. While members do have a say in the management through governance mechanisms, the daily operations and strategies are often too complex for individuals to handle. Hence, the role of the attorney-in-fact is crucial in executing the collective objectives laid out by the members or subscribers of the reciprocal.