Depends on the structure. Some Mutual Companies have stock companies as well. The Mutual Company can own all of the stock of the stock company with which it is affiliated. The stock company is then not publicly traded and not really distant from the mutual structure.
The article is totally misguided and out right wrong. Mutuals? What is a mutual? The Supreme Court of Ohio decided fifty years ago they could not tell. A mutual is supposed to pay all claims and then any remaining proceeds returned to policyholders each year. How then is there any assets left beyond the capital and funds needed to achieve this premise? Good question. The answer is fraud, the funds due the policyholders were never returned. When Metropolitan converted from mutual to stock BILLIONS and billions were stolen form past and present policyholders. Even the boys on Wall street at Goldman turned pink on that heist.
Another perversion is mutuals creating stock holding companies who are then used to loot the mutual surplus for the benefit of management and investors.
Mutuals are not supposed to be able to raise capital . A stock carrier can do so because it has assets and capital to set aside. Mutual were once allowed a surplus surplus account equal to roughly 6% of their total surplus each year as a shock absorber against impairment from cat claims.
Am mutual then is little more than a privately held stock company who has more limited rights of redemption and ownership. the proceeds flow to the management as items other than stock splits and dividends. Just look at the perks and expenses in lieu of stock company payments.
Now we have the hybrid Mutuals that own stock companies. Nationwide, Liberty Mutual both own stock companies. How do they square results?
@mikeyrooker
You do not know what you are talking about Mikey. 2 connections on Linked In? Come on man! Build that pipeline agent!
Depends on the structure. Some Mutual Companies have stock companies as well. The Mutual Company can own all of the stock of the stock company with which it is affiliated. The stock company is then not publicly traded and not really distant from the mutual structure.
Very well stated, Chuck. Mutual insurers take the long view, and our assessment of them should, too.
The article is totally misguided and out right wrong. Mutuals? What is a mutual? The Supreme Court of Ohio decided fifty years ago they could not tell. A mutual is supposed to pay all claims and then any remaining proceeds returned to policyholders each year. How then is there any assets left beyond the capital and funds needed to achieve this premise? Good question. The answer is fraud, the funds due the policyholders were never returned. When Metropolitan converted from mutual to stock BILLIONS and billions were stolen form past and present policyholders. Even the boys on Wall street at Goldman turned pink on that heist.
Another perversion is mutuals creating stock holding companies who are then used to loot the mutual surplus for the benefit of management and investors.
Mutuals are not supposed to be able to raise capital . A stock carrier can do so because it has assets and capital to set aside. Mutual were once allowed a surplus surplus account equal to roughly 6% of their total surplus each year as a shock absorber against impairment from cat claims.
Am mutual then is little more than a privately held stock company who has more limited rights of redemption and ownership. the proceeds flow to the management as items other than stock splits and dividends. Just look at the perks and expenses in lieu of stock company payments.
Please explain what a Reciprocal Exchange is as was operated for many years by Farmers?