A Georgia insurer has no capital stock and is owned by its policyholders, who may share in its results. This company is best described as which of the following?

Why C is correct

Under O.C.G.A. § 33-14-2, a mutual insurer is one without capital stock that is owned by its policyholders, who may share in its results through policyholder dividends. This ownership structure distinguishes mutuals from stock companies, whose owners are stockholders, and from other organizational forms such as reciprocals and fraternal benefit societies, each governed by its own Georgia rules.

Why the other options are wrong

• A) A stock insurer is owned by stockholders who contributed capital, not by policyholders.
• B) A fraternal benefit society operates on a lodge system for the benefit of its members and is a distinct organizational form under Georgia law.
• D) A reciprocal insurer is an unincorporated grouping of individuals who insure one another through an attorney-in-fact, not policyholder ownership of a corporate insurer.

Memory hook

Mutual means the policyholders own the house.