An entity combines a mutual insurance holding company structure with reciprocal exchanges. This structure allows policyholders to be members and share in the company’s potential profits through dividends or other means. The National Association of Insurance Commissioners (NAIC) assigns a unique identifying number to each insurance company operating within the United States, including those operating under this type of structure. This number is used for regulatory oversight and data collection. The numerical designation facilitates tracking and reporting of financial and operational information.
This particular organizational model offers certain advantages, such as potential alignment of interests between the insurer and the insured. Policyholders may benefit from profit sharing. From a regulatory perspective, the NAIC number provides a consistent and reliable method for regulators to monitor the financial health and operational practices of the insurer, ensuring compliance with state and federal regulations. Furthermore, it allows for consistent data aggregation for industry-wide analysis and benchmarking.
