Who elects the governing body of a mutual insurance company
A) chairman of the board
B) bondholders
C) stockholders
D) policyholders
The Correct Answer for the given question is option D) policyholders
Mutual insurance companies are governed by a board of directors, and the policyholders elect them. They set the corporate goals. They are also implementing corporate strategies to ensure quality products are delivered. They own the mutual insurance company. The surplus may be distributed through dividends or retained in exchange for future premium reductions. To summarize, mutual insurance is owned by its policyholders. These policies are designed to give policyholders full control over the management of their company and to provide insurance coverage.
Mutual insurance companies are governed by a board of directors. The board is made up of members who are either bondholders or policyholders. Bondholders elect the majority of the directors, but they do not elect the governing body. Policyholders elect a minority of the directors. The board’s job is to manage and operate the company, make decisions about its future, and protect the interests of its policyholders.
Mutual insurance companies are regulated by the state in which they are located. The shareholders of a mutual insurance company do not elect the governing body of the company. This body is typically a board of directors. The board of directors makes decisions on behalf of the shareholders, and usually operates in the best interest of the company as a whole.
The chairman of the board of directors does not elect the governing body of a mutual insurance company. This is because the board is responsible for managing the business and affairs of the company, while the governing body is responsible for setting policy and overseeing day-to-day operations.
Which of the following typically have the highest auto insurance premiums?