Which of the following statements about stock insurance companies is true?
A) Stockholders provide operating capital and receive dividends.
B) They are nonprofit organizations.
C) The insureds own the company.
D) They are more likely to provide lower-cost insurance than mutuals.

Question

Quizplus · Accepted Answer

Stock insurance companies are owned by shareholders who provide the capital necessary for the company's operations and receive dividends in return. They are different from mutual insurance companies where policyholders are also owners of the company. Stock insurance companies are also for-profit organizations, making them less likely to provide lower-cost insurance than mutuals.

Which of the Following Statements About Stock Insurance Companies Is