Georgia Property & Casualty Practice Exam

What type of insurer provides insurance for members of a vocational society?

1. Captive insurance company

2. Lloyd's Association

3. Reciprocal insurer

4. Fraternal insurer

The correct answer is: Fraternal insurer

A fraternal insurer is a type of insurance company that offers coverage primarily to members of a specific social or vocational organization. These insurers are often formed on a nonprofit basis to provide insurance and other benefits to their members, who typically share a common bond, such as occupation, religion, or ethnicity. The primary purpose of fraternal insurers is to provide insurance protection while promoting a sense of community among their members. Fraternal organizations typically provide life insurance, health insurance, and other financial services that are made available exclusively to their members. Many vary in the benefits they offer, but they often include additional features such as social activities or charitable giving, which further solidify the bond between members. In contrast, the other types of insurers listed serve different purposes. A captive insurance company primarily provides insurance to the entities that own it; a Lloyd's Association focuses on providing specialized insurance and reinsurance through syndicates; and a reciprocal insurer operates in a manner where members insure one another, but does not necessarily cater specifically to members of a vocational society like a fraternal insurer does.