A group of food processing businesses are pooling capital to begin an insurance company, GULP Insurance LLC. Their goal is to provide a layer of property insurance protection for each investing company, and eventually sell policies to others (who are not investors) through a distribution system. They have established a company in the state of Connecticut, and will be selling policies in New York, New Jersey and Connecticut. The product is specialty commercial property Coverage for food processors, and they anticipate that the market demand will be strong, if narrow in focus. Target businesses will be large companies who will be interested in adding this specialty coverage for their food operations. They currently purchase similar (but less broad) coverage from national carriers. You have been hired to assist them in the launch of this new insurance company. You are facing several operational questions: 1. Ownership Style - how would you recommend they structure ownership of this new venture. Why would you recommend this ownership style? When the business matures do you think this should be the ownership style or would another be more appropriate? 2. Regulatory Involvement - Outline the types of filings that need to be made to the insurance department. What impediments and challenges do you see in establishing initial rates and pricing for this coverage? 3. Distribution System: When the product is ready to be sold to the public, what distribution system do you recommend. Why? 4. You are concerned about a shortfall in surplus and capacity. What can you recommend to help spread risk and ensure that the new company does not overextend it's financial resources? 5. Identify some key metrics you will use to measure activity and results. (don't over think this one) 6. What basic core functions of an insurance company does this fledgling enterprise need to build, rent borrow or buy in order to fully function? 7. What do you see as the major concerns of this new enterprise? What major challenges does it face