Services

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Reciprocal Exchange Form of Insurance Company

For over 25 years, the firm’s principal has provided general counsel and special counsel representation to reciprocal exchanges throughout the United States on a number of issues including achieving regulatory compliance under federal and state statutes, licensing and registration, regulatory filings and product development, corporate structuring and restructuring, subscriber account structures and allocation methodologies, corporate governance, financial and market conduct examinations, holding company matters, mergers and acquisitions, federal income taxation, state premium taxation, reinsurance, and numerous other day-to-day regulatory, operational, and transactional matters many of which are unique to reciprocal exchanges.

We help create tax-efficient structures for our reciprocal exchange clients and routinely advise Boards of Directors on corporate governance, subscriber account and allocation issues, and various other reciprocal specific issues to take full advantage of this form of company. We also have considerable experience drafting, revising, and updating state reciprocal statutes. In addition, we have handled numerous significant transactions for reciprocal exchanges, including the first conversion of a nationwide stock insurer to a reciprocal exchange.

See below for the types of services we perform.

Virginia State Corporation Commission – Bureau of Insurance

Services include:

  • Organization
  • Licensing
  • Advise board of directors, subscribers advisory committee and officers on special corporate governance issues of reciprocals
  • Structuring of subscriber savings accounts
  • Strategic use of and structuring of other subscriber equity accounts
  • Subscriber account transfer structures
  • Allocations to subscriber accounts
  • Subscriber equity account allocation methodologies
  • Preparation of subscriber’s agreement and power of attorney
  • Capital contribution agreements
  • Preparation of other organizational documents
  • Conversion of stock insurance company to reciprocal insurance company
  • Internal revenue service rules on distributions
  • Agreements between reciprocals and attorney-in-fact
  • Attorney-in-fact organization and structuring purposes
  • Special reciprocal tax considerations and analysis
  • Internal Revenue Service Private Letter Ruling requests regarding various reciprocal and subscriber issues
  • Subordinated debt structures and documentation
  • Special considerations for “for profit” reciprocals
  • Blended reciprocal model
  • Reciprocal reinsurance company structures
  • Analysis of various reciprocal-specific issues and considerations
  • Non-assessibility
  • Terminating subscriber issues
  • Reinsurance agreements and transactions
  • Management agreements
  • Redomestication
  • Acquisitions and mergers
  • Due diligence
  • Affiliation agreements
  • Divestitures
  • Holding company regulation and issues
  • Existing reciprocal statutory considerations
  • Legislative drafting
  • Regulatory issues
  • Rate and form filings
  • Rate hearings
  • Insurance policy rewrites
  • Securities issues
  • Subsidiary issues
  • Examination reports
  • Market conduct studies
  • Intellectual property
  • Twenty-plus years advising reciprocal insurance companies