captive insurance company. A company that insures the liabilities of its owner. • The insured is usu. the sole shareholder and the only customer of the company.
— Also termed captive insurer. [Cases: Insurance 1192.]
mixed insurance company. An insurance company having characteristics of both stock and mutual companies in that it distributes part of the profits to stockholders and also makes distributions to the insureds.
mutual insurance company. An insurance company whose policyholders are both insurers and insureds because they pay premiums into a common fund, from which claims are paid; an insurer whose policyholders are its owners, as opposed to a stock insurance company owned by outside shareholders. Cf. stock insurance company. [Cases: Insurance 1121. C.J.S. Insurance §§ 99, 109.]
“Mutual insurance companies are organized by a number of persons for the purpose of transacting some particular insurance business …. A company is a mutual one when the persons constituting the company contribute either cash or assessable premium notes, or both, to a common fund, out of which each is entitled to indemnity in case of loss. The distinguishing feature is mutuality, evidenced by the co-operation of members, uniting for that purpose, each taking a proportionate part in the management of its affairs and being at once insurer and insured, contributing to a fund from which all losses are paid …. Democratic ownership and control is a fundamental characteristic of a mutual insurance company.” 18 John Alan Appleman, Insurance Law and Practice § 10041, at 79–80 (1945).
stock insurance company. An insurance company operated as a private corporation and owned by stockholders who share in the company’s profits and losses.
stock life-insurance company. A stock insurance company that does life-insurance business.
