Additionally, there are two types of consumer cooperatives.  One is the mutual insurance model discussed previously and the other less common and unincorporated type is a reciprocal company.

A reciprocal company is based on the model of give and take.  Members agree to share insurance responsibilities among all members.  All members insure one another and share in the losses and no member can buy insurance without committing to providing insurance in return.  This type of consumer cooperative is managed by an attorney-in-fact who handles all matters of business for the cooperative.

Participating and Non-participating Policies.  These terms indicate that the policyholder of a traditional type of insurance, either does or does not participate in, or receive, a share of any surplus that results from an insurers business operations.  These terms are also known as par and non-par.

The surplus from which participating policyholders might receive a return are excess reserves for claims, interest on investments and savings on expenses.  This represents amounts not ear marked for any particular purpose and are therefore available to participating policy owners.