What is a Reciprocal Insurer? What is the relationship between Erie Indemnity Company and Erie Insurance Exchange?
A reciprocal is an unincorporated group of persons known as subscribers who, under a common name, exchange insurance contracts with each other for the purpose of providing indemnity among themselves from losses through a common attorney-in-fact. Each subscriber gives a power of attorney under which the attorney-in-fact represents each subscriber in exchanging insurance contracts with the other subscribers. The Erie Insurance Exchange is a reciprocal insurer. An attorney-in-fact is a legal entity (Erie Indemnity Company, a corporate attorney-in-fact) that is legally appointed by another (subscribers of the Erie Insurance Exchange) to transact business on its behalf.
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