State RegulationsGA specificDifficulty 1/5
Which statement correctly describes a stock insurance company?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-14-2, a stock insurer is a corporation owned by its stockholders, and ownership and customer status are separate: shareholders receive the company's earnings, while policyholders are simply customers. This is the defining contrast with a mutual insurer, where the policyholders themselves own the company.
Why the other options are wrong
- A) Policyholder ownership describes a mutual insurer, not a stock company.
- C) A stock company's earnings go to its shareholders; they are not automatically returned to policyholders.
- D) Fraternal benefit societies are a separate organizational form built around a lodge system.
Memory hook
Stock = shareholders own it; mutual = policyholders own it.