What type of insurance results from reciprocal agreements of indemnity among subscribers?

Reciprocal insurance arises from the mutual agreements of indemnity among a group of subscribers who come together to insure one another. This type of insurance is based on a cooperative arrangement where each member (or subscriber) agrees to contribute to a common fund used to pay claims. Essentially, subscribers share risks and rewards, making it a collective insurance strategy.

In reciprocal insurance, the subscribers appoint an attorney-in-fact who manages the operations of the reciprocal, including the handling of premiums and claims. This structure allows individuals or entities to safeguard their interests while benefiting from the pooled resources, leading to potential cost savings and increased efficiency.

This cooperative nature is distinctive compared to mutual insurance, which is owned by policyholders but does not specifically focus on the reciprocal agreements aspect. Fraternal insurance is often geared toward specific groups or associations with social or charitable functions, and commercial insurance typically refers to policies designed for businesses rather than a cooperative indemnity arrangement among individuals. Thus, reciprocal insurance is the correct answer because it directly aligns with the premise of subscribers indemnifying one another through a structured mutual agreement.