Glossary
Risk carrier
The insurer, mutual, or provident institution that financially guarantees a policy and pays out benefits in the event of a claim, as opposed to the distributor or the administrator, who do not carry this risk.
Behind a policy sold under the trade name of a broker or a distribution brand, there is always a distinct legal entity that actually carries the financial risk: it is this entity that collects the corresponding premiums and must pay out benefits if a claim arises. Its name appears in the policy’s general terms or information notice, not necessarily in the trade name shown to the client.
This distinction matters because the distributor (broker, wholesale broker) and the risk carrier do not carry the same responsibility: the former advises on and arranges the policy, the latter financially guarantees its performance and is the one whose solvency and prudential supervision (ACPR) ultimately determine the security of the cover.
Example
A policy sold under a broker's trade name may in fact be carried by a third-party insurance company, whose name appears in the general terms: it is that company that pays out benefits, not the commercial distributor.
Also searched as: carrying insurer · carrying company
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