Insurance

Insurance has roots back many hundreds of years, but most companies started as a way to pool small contributions from many people to cover unforeseen losses of a few. Midstate Mutual Insurance Company still pools the premiums from each policyholder and invests them until needed to pay claims.

Even as a regional, Midstate Mutual performs functions expected of any national company, such as appointing agents, issuing policies, collecting premiums, paying claims and maintaining reserves and surplus against losses. The company files the same annual statement as the national companies and is subject to nearly all of the same insurance laws and regulations.

The company’s operations fall into three main areas:

  1. Underwriting: working with agents to issue policies and collect premiums.
  2. Claims: working with policyholders to settle claims they submit.
  3. Investments: managing the company’s reserves for the best rate of return and to meet statutory and regulatory requirements.

The basic principle of insurance is a "promise to pay". The company collects the premiums and promises to pay if an unexpected covered loss occurs. The company would fail in its promise if it cannot respond to a covered claim.