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Participating and Non-participating Companies

Participating company offers a dividend on its policies, and a non-participating company does not.

Usually the term "participating companies" refers to an insurance company that writes policies that allow policyholders to "participate" in the results by paying dividends. Non-participating companies do not offer dividends.

States have different regulations on the ability for a carrier group to offer both participating and non-participating policies through separate companies within the group. In some states, the carrier must declare one or the other for the entire group. In other states, a carrier group can offer both through separate companies.

The Indiana DOI allows one carrier to do both (offer participating and non-participating policies). The ICRB By-laws do not address this situation.

The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.