Which of the following is a defining feature of a mutual insurance company?

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Multiple Choice

Which of the following is a defining feature of a mutual insurance company?

Explanation:
Mutual insurance companies are owned by those who hold the policies, not by stockholders. Because ownership rests with policyholders, they have the right to elect the board of directors who run the company. This contrasts with stock insurers, where ownership and control go to stockholders and profits are typically distributed to them. In mutuals, profits usually stay with policyholders as dividends or lower premiums. So, policyholders elect the board is the defining feature.

Mutual insurance companies are owned by those who hold the policies, not by stockholders. Because ownership rests with policyholders, they have the right to elect the board of directors who run the company. This contrasts with stock insurers, where ownership and control go to stockholders and profits are typically distributed to them. In mutuals, profits usually stay with policyholders as dividends or lower premiums. So, policyholders elect the board is the defining feature.

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