Legal Definitions - mutual insurance company

A mutual insurance company is a type of insurance company where the policyholders are also the owners. They pay premiums into a common fund, which is used to pay out claims. This is different from a stock insurance company, which is owned by outside shareholders.

• Captive insurance company: A company that insures the liabilities of its owner. The insured is usually the sole shareholder and the only customer of the company.
• Mixed insurance company: An insurance company that has characteristics of both stock and mutual companies. It distributes part of the profits to stockholders and also makes distributions to the insureds.
• Stock insurance company: An insurance company that is operated as a private corporation and owned by stockholders who share in the company's profits and losses.
• Stock life-insurance company: A stock insurance company that does life-insurance business.

These examples illustrate the different types of insurance companies that exist. A mutual insurance company is unique because the policyholders are also the owners, which means they have a say in how the company is run. This democratic ownership and control is a fundamental characteristic of a mutual insurance company.