General Insurance
Who owns a mutual insurance company?
Answer and explanation
Answer: A. A mutual insurer is owned by its policyholders, who may receive dividends representing a return of divisible surplus. A stock insurer is owned by shareholders, agents hold appointments rather than ownership, and a mutual insurer is a private company rather than a state one.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, stock and mutual companies
More general insurance questions
- Why is an insurance contract classified as a conditional contract?
- Why is an insurance policy a contract of adhesion?
- A business installs sprinklers throughout its warehouse. Which method of handling risk is that?
- A firm raises the deductible on its cover and keeps the first layer of loss itself. Which method of handling risk is that?
- A homeowner stores petrol in an attached garage. In risk terms, what is the petrol?
- A life insurance policyowner may stop paying premiums at any time without legal penalty, but the insurer is legally bound to pay the death benefit if the insured dies while the policy is in force. This situation best illustrates which legal characteristic of an insurance contract?
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