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starting an insurance company

Henry0Reilly
How the heck do ya do that?

We were discussing getting insurance for the full time employees of the American Legion I belong to but it's so expensive. We got to thinking that if all the veteran groups and lodges / clubs got together we could create a group insurance plan. I suggested calling it the Bartender's Benevolent Fund.

How much red tape are we talking about here? Is there a kit for starting an insurance company like there is for FFL/gunshop beginners?
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Comments

4 comments

Date Votes
  • spanielsells
    To be a legal insurance company (versus a protection racket that will get the Feds involved), you must register with every state that you will do business in. This involves dealing with the various insurance commissioners in each state. You have to have your premiums approved by the insurance commissioners, you must submit your rate plan and you most show how you plan to remain solvent.

    You will likely want to purchase an insurance policy from a reinsurer. Reinsurers essentially guarantee your solvency.

    While this idea sounds good in your mind, once you start running the numbers, you will come to the understanding that most insurance companies do not make money off of their premiums and, in fact, lose more money than they bring in. Most insurance carriers invest their monies to remain profitable.

    Note, it is illegal in most states to not set aside enough in what is called "reserves" to pay claims.
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  • rovrman
    After loosing everything I owed during hurricane Katrina, I wouldn't want to be apart of any insrance company. Its a racket.
    Not profitable.....my ass.
    I was raped without vasoline by allstate
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  • spanielsells
    quote:Originally posted by rovrman
    After loosing everything I owed during hurricane Katrina, I wouldn't want to be apart of any insrance company. Its a racket.
    Not profitable.....my ass.
    I was raped without vasoline by allstate
    Then you don't know what you're talking about, but feel free to relish in your own opinion.
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  • Warpig883
    spanielsells is correct,

    Insurance companies use the premiums to invest. It is the interest they make off the premium investments before paying the premiums back as claims which gives them profits. In good years the get the interest and the premiums to keep, in bad years the pay out the interest and the premiums.

    If you are going to start your own you will need some very deep pockets to guarantee the policies you sell or you will not be able to be licensed anywhere.
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