Types of insurer defined by ownership

Question 1

Proprietary companies

Answer 1

Limited liability companies owned by their shareholders (shareholders buy shares in the company and therefore share in the profits of the company). Shareholders liability for any debts are limited to the nominal value of their shares.

Question 2

Societas Europaeas

Answer 2

Public EU companies that can register in any member stateof the EU and transfer to other states without having to liquidate. Tax efficent as can set company up in a country with a favourable tax system.

Question 3

Mutual companies

Answer 3

Companies owned by their policyholders, policyholders share in the companies profits through lower premiums. Mutual companies are limited by gurantee meaning policholders max liability is limited to their premium.

Question 4

Mutual indemnity associations

Answer 4

Self managed pools of insurers owned by their policyholders. Primarily active in marine insurance where P&I clubs insure certain parts of marine hull liability.

Question 5

Captive insurers

Answer 5

A company established by it’s parent that provides insurance primarily to the parent - captive insurers do not offer insurance to the public. It’s a tax efficent way of insuring risks.

Question 6

Protected cell companies

Answer 6

A type of captive insurer which ring fences the assests of all participating cells but allows them to operate as their own entities. PCC’s operate in 2 parts - a core and an unlimited number of cells - it acts as a single legal entity with a single board of directors that manages the PCC as a whole.