Mutual Company

Also found in: Financial.

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.

See: partnership
References in periodicals archive ?
Larger companies tend to be a little more sophisticated than the smaller companies regardless if they're a stock or a mutual company.
7 August 2012 - Physicians Insurance A Mutual Company, a US medical professional liability insurer, announced the acquisition of sector firms Emergency Medicine Professional Assurance Company (EMPAC) and SCRUBS for an unspecified amount.
Mitsui Life transformed itself from a mutual company to a stock firm in 2004 in a bid to raise funds more flexibly.
If a mutual company adheres to its intent, this may enhance a policy's cash value.
One of the advantages to a mutual company is the absence of shareholders, the report says.
As a mutual company, we've worked very closely with the mine owners, International Coal Group, and we are going with them to meet with the mine families on an individual basis to walk them through the claims process and help them with the paperwork," Wessels said.

Full browser ?