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What is an Insurance Carrier or Insurance Company?

What is an Insurance Carrier or Insurance Company?

Insurance carriers are companies that provide products (policies) that cover a single specific risk or a number of specific risks, under agreed terms and conditions. The three most common types of insurance companies are Standard Line Carriers, Surplus Lines Carriers and Captive Carriers. A Standard Line Carrier sells insurance policies such as life, health, auto, and home insurance to the general public. A Surplus Line Carrier specializes in providing coverage for higher-risk customers. And a Captive Carrier is an insurer owned by a larger company which provides insurance only for that company’s employees or products.

In all cases, carriers assess the risks of insuring customers and determine the associated premiums. They also pay out benefits to customers who file claims for covered losses, either directly or through an intermediary such as a Managed General Agent (MGA) or Third-Party Administrator (TPA). Insurance is a highly regulated industry and carriers must be licensed in each state in which they operate, and follow many federal and state laws and regulations.