Reciprocal inter-insurance exchange

An unincorporated reciprocal inter-insurance exchange, sometimes abbrieviated URIE, is a special form of insurance company referred to in various US state legislation as either a reciprocal insurance exchange or a reciprocal inter-insurance exchange: and is conventionally but not necessarily managed by an attorney in fact (AIF). URIEs, like trusts, may be self-directed. Self-direction rather than appointing an AIF is apparently a method used by some New York State municipalities which band together to form URIEs.

URIEs are often confused with incorporated mutual insurance companies. A URIE is not a mutual insurance company. Dennis Reinmuth in his book on URIEs (v.i.) concludes that a more accurate analogue is to compare them to an LLC or perhaps even an LP.

What is the proper name for the persons who make up a URIE?

LLCs are made up of "members". URIEs are populated by subscribers, who are sometimes incorrectly referred to as "members" so as to impart a sense (perhaps a false sense) of "belonging to something".

One is reminded, of course, of Groucho Marx when he said "he wouldn't want to belong to a club which would have him". The notion of "membership" in a URIE and actually "owning something" in a URIE may be the siren's song of a relatively unattractive financial opportunity. As they say, "if it sounds too good to be true, it ain't". Or as they are so fond of saying in Brooklyn, "if it ain't right, it ain't right". So much for Yogi Berraisms.

The only thing owned by subscribers at a URIE is the obligation to indemnify each and every of the other subscribers. At a large URIE, as in the case of California-based Farmers and the Automobile Club of Southern California or Texas' USAA, this can mean that each subscriber is legally obliged to pay the insurance claims of millions of other subscribers. And it is important to note that subscribers can be assessed additional contributions, and compelled to put up more money if the URIE fails financially.

Pundits who follow the question of the operations of URIEs on Wikipedia have suggested that this article needs "expert intervention": see the note at the top of this page. The problem here is that all of this is what lawyers call "a case of first impression": and this article on URIEs could benefit from submissions by many lawyers who are willing to personally sign articles on the issue of "subscriber liability" at URIEs. It would be also be nice if URIE's like USAA were to simply explain their positions rather than engaging in acts of extraordinary rendition against writers who point out the inherent defects in the URIE's modus operandi.

Subscribers at a URIE enter into a direct partnership with each and all of the other subscribers in a business combination which possesses most of the features associated with a mutual agency. As is also true in the case of the LLC and the LLC's members, there is no incorporated limited liability entity owned by shareholders'''''. The URIE is also completely unlike the Corporation , where ownership and conclusive limited liability is evidenced by stock certificates issued to each owner in proportion to his ownership.

A members of an URIE may be either a natural person, a LLC or LP, a partnership, or a corporation. In some states, municipalities form URIEs to cross-indemnify towns, cities, villages, and counties.

The role of the attorney in fact at a URIE

The AIF is a stakeholder/trustee who holds the deposits made by each member. In that regard, the AIF is a classic trustee, and the members are the beneficiaries of the trust.

URIEs run by California-based Farmers Group (parent is Swiss-based Zurich Financial Services) and the Automobile Club of Southern California are clean operation which return all of the under-writing profits to the subscribers at year's end. In the case of Farmers and the California Auto Club, there is a well-capitalized "corporate AIF": and it is believed that the "corporate AIF" in these two cases collects a commission on premiums, and from that point forward settles claims in a completely neutral manner.

The AIF at USAA is quite different: in essence, the USAA AIF is a natural person who brings no capital to the situation. The fly in the ointment at USAA is that the AIF may have a stake in accumulating "unasigned surplus" as USAA has never issued any capital stock. This is a very complex and litigious situation which bears a clear and concise explanation from USAA's AIF.

The the meantime, readers may wish to consult True v USAA.

Zorro redux 20:15, 3 January 2006 (UTC)

Extraordinary Rendition by a URIE

Koenig is a New York member of a URIE, USAA, and is also a vocal critic of USAA's Capital Structure. Robert G. Davis, attorney in fact of USAA, obtained a Texas court order compelling Koenig to pay Robert G. Davis $40,000 for writing ascerbic and entirely truthful commentary about the $5 billion USAA holds in "unassigned surplus". This is the story of how Davis enforced his desire to silence Koenig.

On Wednesday, December 14, 2005, at about 10 AM, 4 deputies in two cars from NY's Nassau County Sheriff's department, operating on instructions from Robert G. Davis, swooped down on Robert J. Koenig at 9 Tiffany Road, Oyster Bay, NY.

File:Nassau county sheriff lt miritello 3-5.gif

Nassau County Sheriff's Lieutenant Bill Miritello was in charge of the detail which detained Koenig. Here is his business card and telephone number. These facts can be verified with LT. Miritello; and he can describe the order arresting Koenig.

File:Nassau county sheriff sgt macintosh 3-5.gif

Sergeant David D. MacKintosh assisted along with two other Sheriff's Deputies.

Koenig was transported in shackles to the Nassau County Correction Center, placed in solitary confinement and held incommunicado for 6 days in a windowless, 24-hour brightly-lit 6' x 8' cell, with no clock. Koenig was fed in his cell. Koenig was denied any sort of writing implement, paper, and any means to contact a lawyer. Koenig was stripped of his watch and all personal possessions, and provided with only an orange shirt, orange prison trousers, and orange thin-soled sandals, a half-bar of soap, and a roll of toilet-paper; Koenig was provided no underwear and no socks. Koenig was provided with no out-doors exercise. Koenig was let out of his cell twice daily for a short period. On the evening of the 6th day (Monday, December 19th), Koenig was cross-arm shackled to another prisoner (a delightful fellow who had just shot and killed a drug dealer), transported by closed windowless truck to an unidentified satellite facility of the jail, and released into the general population - in a cell-block of about 50 prisoners. 7 days after his detention, on Tuesday, December 20th, at about 3 PM, Koenig was taken before and ordered released by Judge Robert Roberto of the Nassau Supreme Court. Upon Judge Roberto's written order that he was a "free man", Koenig was re-shackled by Sheriff's Deputies, taken to another local holding facility in a separate court house, held there for one hour, cross-arm re-shackled to another prisoner, transported back to the satellite facility, ordered to change back into prison uniform, strip-searched, taken to another local holding room for 90 minutes, cross-arm shackled to another prisoner (a rapist this time), transported to the main prison, strip searched, ordered to change into his civilian clothes, re-fingerprinted to show that he was the same person incarcerated 7 days earlier, paid back only $3 of the $17 he had when he arrived, and shoved out onto the street in 23 degree temperature at 9PM. Koenig walked 17 miles back to his home, getting in at about 11PM.

Koenig is back at work on his book: a biography with the working title - "Grand Theft - Insurance". Several of the correction officers at the Nassau County Correction Center volunteered to be in the film: so did lots of the prisoners. Since Koenig was raised in Europe and speaks French fluently, many of the aspiring prisoner/actors are very tall and sort of bulky Haitian drug-runners who are very interested in potential acting careers. Koenig made a lot of friends in prison: and they all thank the USAA attorney in fact for his act of extraordinary rendition in sending Koenig to jail for writing his book about USAA.

References

The Regulation of Reciprocal Insurance Exchanges, by Dennis F. Reinmuth (No ISBN)
USAA. A Tradition of Service 1922 –1997, by Paul T. Ringenbach (ISBN 0-89865-993-0)
USAA: life story of a business cooperative, by Edward Clare Dunn (ISBN 07-018280-9).

The role of the attorney in fact at a URIE

Extraordinary Rendition by a URIE

See also

References