Who is referred to as the insurer or principal in insurance?

The insurer or principal in insurance is best described as the company that issues an insurance policy. This entity takes on the risk associated with the insurance coverage and is responsible for providing the policy benefits to the policyholder in the event of a covered loss. The insurer evaluates risks, sets premiums, and establishes the terms of the policy, and it is ultimately liable for paying claims that arise under that policy.

The agent, while important in the distribution and sales of insurance, acts as a representative of the insurer and does not assume the insurance risk themselves. The policyholder, on the other hand, is the individual or entity purchasing the insurance and is seeking protection against potential losses but does not function as the insurer. Lastly, the state regulator’s role is to oversee and ensure compliance within the insurance market, but they are not involved in the actual issuance of insurance policies. Thus, the company that issues the policy serves as the insurer or principal, accurately defining this important role within the insurance structure.