A group of investors are discussing the formation of a new property and casualty insurer. The proposed company would market a new homeowner's policy that combines traditional homeowner coverages with unemployment benefits if the policy owner becomes involuntarily unemployed.
Each investor would contribute at least $100,000 and would receive a proportionate interest in the company.
In addition, the company would raise additional capital by selling ownership rights to other investors.
Management wants to avoid the expense of hiring and training agents to sell the new policy and wants to sell the insurance directly to the public by selective advertising in personal finance magazines.