Which of the following is a characteristic of a Mutual Insurance Company?

A mutual insurance company is characterized by its ownership structure, which is fundamentally different from stock insurance companies. In a mutual insurance company, the policyholders are also the owners. This means that there are no external stockholders who own shares in the company. Instead, the focus is on serving the interests of the policyholders rather than generating profits for shareholders.

This ownership structure allows mutual insurance companies to prioritize the needs of their members, leading to potentially lower premiums and a focus on providing dividends or benefits to policyholders instead of maximizing profits. Mutual companies often reinvest surpluses back into the company for the benefit of their members, such as in the form of improved services or lower rates, instead of distributing profits to stockholders.

Other characteristics of mutual insurance companies include a democratic governance structure, where policyholders may have voting rights to elect the board of directors, further emphasizing their commitment to serving the interests of their insureds.