Question:

Who insures the insurance companies?

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Just out of curiosity who insures the insurance companies? Do they insure themselves? If so, due to all the bureaucratic BS do they have to pay a deductible to themselves? Or are they insured by other companies? Is it just one big circle?

For example: Company X's building gets destroyed by a tornado, do they pay for everything or are they insured by Company Y.

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4 ANSWERS


  1. The bank that the company uses insures them.


  2. Reinsurance companies insure insurers.

    For a fee, a reinsurer covers insured losses after a specific threshold of losses/claims. Warrren Buffett's companies (General Re, Geico, etc) both invest and participate in reinsurance pools.

    They can be very profitable business lines; they can also protect insurance companies from failing (thereby protecting policyholders).

    There may be banks or investment pools that participate or invest in reinsurance, but a commercial bank would not participate in any form of reinsurance. An insurance company's bank would process payment, hold deposits, administer payroll/direct deposits, offer loans or lines of credit, and perform similar functions to an insurer as they would to any other type of firm.

    But an insurer's bank doesn't insure an insurance company.

    The insurance company's property, plant, equipment, comp, etc, could be self-insured or insured as any other firm would be.

  3. they insure themslevs i guess ... or team up with one other company

  4. Insurance companies are self insured. Self insured companies must provide a bond or cash deposit to the State to insure.

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