USAA is a major insurance company. The name “USAA” stands for United Services Automobile Association.
It is a company that is based in San Antonio, TX.
They advertise themselves as insuring members of the U.S. Military.
In fact any person related to a present or former member of the U.S. Military are insured by them.
Coverage also is generational. That is, if your mother was in the U.S. Military then you are entitled to be insured by this company.
The advertising motif of the company is very slick. The suggestion is that they somehow are protecting the military.
They do have at least 2 subsidiaries. One of them is called “USAA General Indemnity Company” which is a stock corporation. The other entity is “USAA Casualty Insurance Company” which also is a stock corporation. USAA itself is not a stock corporation. It is an insurance reciprocal.
As to the reciprocal company, there probably is no diversity in federal court. As to the stock corporations which are affiliates, there could be diversity.
Car Accidents Involving USAA-Reciprocal Exchange
An insurance reciprocal is not a corporation. It really is just an association of people who have purchased a policy. Sometimes the reciprocal may be called a “reciprocal insurance exchange”.
In a reciprocal exchange, the policyholders insure each other. In a typical insurance company, you are buying a policy from a for-profit insurance corporation. The exchange is not a corporation. Rather its policyholders, called “subscribers” or “members”, agree to share in the risk of the group. In that fashion, everyone helps pay for the losses suffered by any one member.
The exchange appoints an attorney-in-fact i.e., a company to handle underwriting, claims, billing and compliance. The reciprocal is an “unincorporated association”.
The association is member owned. Any profits or surplus are returned to the members either as dividends or used to reduce future premiums.
Losses may result in higher future premiums. Typically any losses are not assessable against the members. What that means is that the members are not personally liable beyond their premium for any losses suffered by the exchange. Losses instead are simply covered by the premiums and potentially any reinsurance that the exchange purchases.
Other such exchanges are Farmers Insurance Exchange and many medical malpractice companies. Also other professional liability companies may operate as an exchange.
These exchanges are licensed as insurers. They must meet certain capital and surplus requirements of the state where they operate. The regulators from the state agency treat them as if they were an insurance company for oversight purposes.
In many respects they are similar to a mutual company. For instance State Farm is a mutual company. A mutual company is a corporation which has members. A reciprocal is not a corporation.
Car Accidents Involving USAA-Who to Serve
If you have a claim against USAA and need to serve process on them, that can be difficult in Virginia. They do not have the standard registered agent listed with the State Corporation Commission. Since they have no registered agent in Virginia and since they are an insurance reciprocal, you have to serve either the Secretary of the Commonwealth or the Clerk of the State Corporation Commission.
Service on USAA should be pursuant to Va. Code § 12.1-19.1 or § 39.2-121.
Call or contact us for a free consult. Also for more info on USAA see the Wikipedia pages.
