______________ is the management of the reciprocal, becoming both the organizer and promoter of the exchange.

Question

Options

• AFractional share
• Brecognized fund
• Cattorney-in-fact
• Dongoing mutual gains

• A
  3% (1)
• B
  9% (3)
• C
  81% (26)
• D
  6% (2)

Explanation

Attorney-in-fact is the designated manager of a reciprocal insurance exchange - a type of insurer where subscribers exchange coverage with one another. The attorney-in-fact serves the dual role of organizer (structuring the exchange) and promoter (soliciting new subscribers), making it the entity that holds the reciprocal together operationally.

Why the distractors are wrong:

• A. Fractional share refers to a partial unit of stock ownership - it's an investment concept, not an exchange management role.
• B. Recognized fund is not a standard term for managing a reciprocal; it describes a type of investment fund, unrelated to the exchange's administration.
• D. Ongoing mutual gains describes a benefit or outcome of exchange relationships, not the party responsible for managing them.

Memory tip: Think of "attorney-in-fact" as the person who acts in fact on everyone else's behalf - in a reciprocal, that's the one entity empowered to run the whole show (organize + promote) so the subscribers don't have to manage it themselves.

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