Reciprocal insurers are:

• A. A group of investors who own stock.
• B. An unincorporated group of members who insure each other via contracts to collectively pay losses.
• C. A currency exchange facility.
• D. A government-run insurer.

Answer: (B)

Reciprocal insurers are unincorporated associations where members insure each other and share losses. Members enter into contracts with an attorney-in-fact who administers the exchange, issues policies, collects premiums, and pays losses. There’s no stock ownership; the organization relies on the members’ contracts to collectively cover each other’s losses. This setup distinguishes them from stock insurers (owned by shareholders), currency exchange facilities, or government-run insurers.