General Insurance PrinciplesQuestion 198 of 315
Which statement BEST distinguishes a stock insurer from a mutual insurer?
a.A stock insurer issues only assessable policies; a mutual insurer issues only non-assessable policies
b.A stock insurer is owned by shareholders and pays them dividends; a mutual insurer is owned by its policyholders and may pay policy dividends
c.A mutual insurer is regulated by the SEC; a stock insurer is regulated by the CDI
d.A stock insurer is non-profit; a mutual insurer is for profit
Explanation
A stock insurer is a corporation owned by shareholders who receive shareholder dividends from profits. A mutual insurer is owned by its policyholders, who may receive policy dividends. Both are regulated by the California Department of Insurance.
Law Reference: Cal. Ins. Code §1100Practice all 315 questions free — no signup required.
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