[M112]

mutual insurance companies

A type of insurance company that is owned by its insureds or policyholders instead of stockholders. A board of directors or trustees are elected by the insured and policyholders to run the business operations. Mutual insurers are bound by the same state regulations regarding the maintenance of funds and reserves as a stock insurer, although the names of the required types of funds may be slightly different. The same types of solvency requirements exist.

(See capital stock insurance.)