Mutual Company

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Mutual Company

A corporation in which members are the exclusive shareholders and the recipients of profits distributed as dividends in proportion to the business that such members did with the company.

The most common kind of mutual company is a mutual insurance company. In this type of organization, which is a cooperative association, the members are both the insurers and the insured. Such companies exist for the purpose of satisfying the insurance needs of their members at a minimal cost. The members contribute through a system of premiums or assessments, forming a fund from which all losses and liabilities are paid. Any profits are divided among the members of the company in amounts proportionate to their individual interests.

The members of a mutual company choose the management. Professional associations that offer their members insurance coverage often form mutual insurance companies.

References in periodicals archive ?
As mutual companies, both continue to be owned by their policyholders.
The interprofessional fruit grouping has already pledged to provide 2.2 million mosquito nets to the 97 agricultural groups and mutual companies that will distribute them to farmers.
The purpose of this contract is to set up building insurance contracts with companies or mutual companies presenting themselves alone or in groups with an intermediary (broker, agent, etc.) for the polyclinique de grande synthe project relating to the realization of phases 1 and 2 of the real estate master plan of the grande synthe polyclinic
Australian Unity, one of Australia's oldest mutual companies with over 7,500 employees, selected Icertis because ICM's easy-to-use UI will enable wide user adoption.
In conjunction with the financing, Grinnell Mutual, the largest primary reinsurer of farm mutual companies in North America, is the lead investor.
Larger competitors are better placed to absorb these costs and will seek to exploit the competitive advantage this gives them over smaller mutual companies. Traditional insurers are targeting health and protection insurance as strategic areas for growth, while bancassurers are stepping up competition in the property and casualty insurance market.
As stock companies we invest like this, and as mutual companies we invest like this.
The loan-to-deposit (LTD) ratio requirement will be eased for foreign bank branches, and the LTD ratio for mutual companies will be raised to the level applied to banks, 100 percent.
Currently, mutual companies account for the largest share of the DIA market though more companies are entering the market.
Even some of the state municipal league risk pools that provide liability and property insurance for cities are structured as mutual companies. A mutual company is owned by and run for the benefit of the policyholders rather than stockholders.
Five of the top six insurers are privately held, and four are mutual companies. "Free from the quarterly earnings pressure on public companies and chartered to serve their customers' interests, these private firms can afford to focus on customer advocacy and reap the long-term benefits of deeper customer relationships," the report states.
The association maintained that Belgian rules gave an advantage to mutual companies over insurers, even though in some cases they offer very close services.

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