Georgia Health Insurance Practice Exam

Question: 1 / 400

Who is a mutual insurance company owned by?

The state government

Its policyholders

A mutual insurance company is owned by its policyholders. This structure is significant because it allows policyholders to have a direct stake in the company. When individuals purchase insurance from a mutual company, they are not just customers; they become members and owners of the company. As a result, policyholders may have the right to vote on important company decisions and potentially receive dividends or premium reductions based on the company’s profitability.

This ownership model contrasts with stock insurance companies, which are owned by shareholders who invest capital into the company. In mutual companies, the primary focus is on serving the needs of the policyholders rather than maximizing profits for external shareholders. This alignment often leads to a more customer-centric approach to insurance, where the interests of the policyholders take precedence.

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Shareholders

The board of directors

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