Some investors decided to start an insurance company.Each investor contributed $50,000 to raise the capital required to charter a new company.Each investor received an ownership interest in the company.The company will raise additional capital by selling ownership rights to other investors.Under this type of organization,the customer and owner functions are separate.This type of insurer is called a

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A stock company is a type of insurer where ownership is held by shareholders who provide capital to the company in return for ownership rights. The shareholders bear the risks and receive the profits of the company. Customers purchase insurance policies from the company but do not have any ownership rights. The fact that the investors in this scenario receive ownership interest in the company indicates that this is a stock company.

Some Investors Decided to Start an Insurance Company