What is an insurance company called that is characterized by member-insureds who are assessed an individual portion of each loss?

An insurance company that is characterized by member-insureds who are assessed an individual portion of each loss is referred to as an assessment mutual insurer. This type of insurer operates on a mutual basis, where policyholders are also considered members. Each member contributes premiums, and in the event of a loss, members are assessed additional amounts as needed to cover claims and operational costs. The assessments are typically based on the individual share of risk that each member represents within the group.

The assessment mutual insurer model emphasizes communal risk-sharing among its members. Unlike traditional insurance models that rely on fixed premiums, this structure allows for more flexibility in responding to claims based on the actual experiences of the group. This can be particularly beneficial in times of significant loss, as members contribute to immediate funding needs.

In contrast, cooperative insurers, fraternal benefit societies, and standard insurers operate under different structures. Cooperative insurers may share profits among members but do not typically use the assessment model. Fraternal benefit societies often provide benefits to members based on a social or fraternal relationship rather than actuarial assessments of risk. Standard insurers generally involve set premiums and do not involve member assessments for losses, focusing instead on underwriting and risk pooling based on predetermined rates.