Any reciprocal insurer formed under federal tax laws must be operated by whom?

A reciprocal insurer operates on the premise of mutual participation where members pool resources for mutual protection. The entity is managed by an "attorney in fact," who acts on behalf of the members and is responsible for handling the day-to-day operations, underwriting, claims handling, and other administrative duties. This structure is crucial because it allows members to delegate authority to one individual or organization to manage the insurer, ensuring effective operation while still maintaining the mutual nature of the business. The attorney in fact must have a thorough understanding of insurance regulations and practices to effectively serve the interests of all the policyholders.

This is why the designation of attorney in fact is essential in the structure of reciprocal insurers, especially under federal tax laws, which require specific operational guidelines. Those in other roles, such as brokers, actuaries, or agents, may play important parts in the insurance industry but do not fulfill the managerial responsibilities required for a reciprocal insurer as defined under federal guidelines.