The demutualization process is expensive and time consuming.As an alternative to demutualization,many states have enacted legislation allowing a mutual company to reorganize as a company that directly or indirectly controls another insurer.The other insurer is a stock company that can issue additional shares of stock to raise capital.The reorganized company is called a
A)captive insurance company.
B)conglomerate.
C)mutual holding company.
D)stock holding company.

Question

Quizplus · Accepted Answer

The option C (mutual holding company) is the best choice as it describes the reorganization process where a mutual company becomes a holding company that indirectly controls a stock insurance company. This allows the mutual company to raise capital without going through the expensive and time-consuming demutualization process. The other options (A, B, and D) do not accurately describe this specific reorganization process.

The Demutualization Process Is Expensive and Time Consuming