Stock Insurer

A mutual insurer is owned by its policyholders, while a stock insurer is owned by its shareholders — A mutual insurance company is owned by its policyholders — there are no shareholders, and any distributable surplus may be returned to policyholders as dividends. A stock insurance company is owned by shareholders who provide capital and expect a return on their investment; profits may be distributed as shareholder dividends rather than policyholder dividends. Both types must remain solvent and are subject to regulation, and both may issue participating policies, but the ownership structure — policyholders versus shareholders — is the defining difference between the two corporate forms.

National insurance concept

Its policyholders, who may receive dividends from surplus — A mutual insurer is owned by its policyholders, not shareholders. Profits are returned to policyholders as dividends or retained as surplus for the policyholders' benefit. A stock insurer, by contrast, is owned by shareholders who provide capital and expect a return on their investment. This ownership distinction affects how surplus is distributed, who elects the board, and how the company is governed. Mutual companies are organized to serve their members, which is why participating policyholders may receive dividends from surplus.

National insurance concept