Mutual Insurance Company
Definition
- A mutual insurance company (also known as a "mutual organization" or a "mutual society") is an insurance company that operates without shareholders; similar to how a credit union works, each individual client owns a portion of the company. Any "profits" are redistributed back to clients in the form of either dividend payments or lowered future premiums.
Synonyms
mutual organization, mutual society, co-operation insurance, co-op company, insurance company
Related Terms and Acronyms
- Credit Union (CU) — Acronym,
- A non-profit, cooperative financial institution owned and controlled by the people who use its services, usually a group such as employees in the same company or industry. Credit unions historically have been able to offer lower rates and fees and still operate in the black. Credit unions rely on a financial reserve to absorb unexpected losses from loan defaults or other financial setbacks, and the majority of credit unions carry federal deposit insurance that protects individual accounts up to a specified amount in the event the credit union fails.
➥ Credit unions are member-owned, full service co-operative financial institutions. - Reciprocal Insurance Exchange — Definition,
- A group of individuals, firms and corporations that mutually insure each other.
- Self Insurance — Definition,
- Setting aside money or assets for a potential future loss.
- Stock Insurance Company — Definition,
- An insurance company with multiple stockholders each owning shares in the corporation.
