The structural difference between a stock insurer and a mutual insurer is that the mutual insurer:
Explanation
A mutual insurer is owned by the policyholders it insures, and any divisible surplus is returned to them as policyholder dividends rather than paid out to investors. A stock insurer is owned by shareholders who elect the board and receive stock dividends, which is the description offered in two of the wrong answers. Assessable policies exist in some mutuals but are not a feature of every mutual line.
This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
Practice all 531 questions free — no signup required.
Own the complete California Property & Casualty Broker-Agent guide — PDF + EPUB, $24.99 →
Related questions on this topic
- In the traditional legal distinction between the two, a broker differs from an agent because a broker:
- A producer deposits client premiums into the agency's general operating account and pays the office rent out of it. This conduct breaches:
- A contractor must show proof of property coverage today, although the policy itself will not be issued for three weeks. A binder issued by the producer:
- A group of subscribers agree to exchange insurance among themselves, and the arrangement is managed for them by an attorney-in-fact. This insurer is:
- In the property and casualty market, Lloyd's is best described as:
- A commercial account with a difficult exposure is placed through surplus lines. Compared with an admitted insurer, the surplus lines insurer:
Last reviewed: · editorial process