An insurer refers to a company or entity that is legally permitted and authorized to write property and/or casualty insurance policies under the laws of one or more states within the United States. An insurer evaluates the risks associated with insuring individuals or entities, establishes appropriate premium rates, and undertakes to compensate insured parties for losses under the terms specified in the insurance contracts.
Key Points
Authorization: Insurers are required to receive authorization from state insurance regulatory bodies before they can offer insurance services. This ensures they meet all necessary financial stability and compliance standards set forth by state laws.
Reinsurer: Sometimes, insurers share the risk they cover by contracting with another insurer, known as a reinsurer. Reinsurers provide a way to manage risk and stabilize the insurance market by taking on some of the potential liability from the primary insurers.
Property and Casualty Insurance: This type of insurance helps protect the insured against potential losses related to their properties (homes, vehicles, etc.) and from legal liabilities that might arise due to accidents causing injuries or damage to other individuals or their properties.
Regulation
Each state’s insurance department regulates insurers operating within its borders, ensuring compliance with local laws and protection for the insured, outlined typically in statutes like the Model Insurance Code developed by the National Association of Insurance Commissioners (NAIC).
For more information, individuals should review the specific insurance codes of their resident state or visit dependable sources like the NAIC website or the respective state’s department of insurance website.
External References
- National Association of Insurance Commissioners (NAIC)
- State-Specific Insurance Department Websites
