Why are some mutual insurers referred to as "assessment mutuals"?
A)They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
B)They are noted for being very thorough in their assessment of investment opportunities.
C)They are assessed for state premium taxes only if they make a profit.
D)They can assess policyholders if premiums are insufficient to pay losses and expenses.

Question

Quizplus · Accepted Answer

Assessment mutuals can assess policyholders if premiums are insufficient to pay losses and expenses. This means that policyholders may be required to pay additional funds to cover losses or expenses beyond what was originally anticipated. This ability to assess policyholders is a key characteristic of assessment mutuals, which distinguishes them from other types of mutual insurers.

Why Are Some Mutual Insurers Referred to as "Assessment Mutuals