Under TIC 801.001, which of the following is expressly included in the definition of "insurer"?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
TIC 801.001(2) defines an insurer as the issuer of an insurance policy issued to another in consideration of a premium, and the definition expressly includes a stock company, a mutual company, a reciprocal or interinsurance exchange, a Lloyd's plan, a group hospital service corporation, a health maintenance organization, and a fraternal benefit society, among others. A reciprocal exchange is therefore an insurer even though it is an unincorporated association of subscribers acting through an attorney in fact rather than a corporation. Entities that merely distribute, adjust, or sponsor insurance issued by others never issue policies as principals, so they are not insurers under the section.
Why the other options are wrong
- A) A bank may market annuities, but the issuer of the contracts is the insurer; the bank is a distributor, not an insurer under TIC 801.001.
- B) An adjusting firm performs claim services for insurers but does not issue insurance policies, so it does not meet the definition.
- D) A sponsoring association facilitates access to coverage issued by an insurer; sponsorship alone does not make the association an issuer.
Memory hook
Issuer equals insurer. Sellers, adjusters, and sponsors are not.