Which of the following statements about mutual insurers is true?
A)They are legally organized as partnerships.
B)They have a board of directors which is selected by state insurance departments.
C)They are owned by their stockholders.
D)They may pay dividends to their policyholders.

Question

Quizplus · Accepted Answer

Mutual insurers are owned by their policyholders, and therefore may distribute excess profits in the form of dividends to policyholders. They are not organized as partnerships, and their boards of directors are typically elected by policyholders rather than selected by state insurance departments. Mutual insurers are also not owned by stockholders.

Which of the Following Statements About Mutual Insurers Is True