Insurance Broker Certification Practice Exam

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Study for the Insurance Broker Certification Exam. Prepare effectively with flashcards and multiple choice questions. Each question comes complete with hints and explanations. Ensure you're ready to excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Who owns a mutual insurer?

Policyholders
Stockholders
Government entities
Investors

The correct answer is: Policyholders

A mutual insurer is owned by its policyholders. This structure means that individuals who purchase insurance policies from the mutual insurer have an ownership interest in the company. Unlike stock insurers, which are owned by shareholders seeking to earn a profit on their investment, mutual insurers are focused on providing value to their policyholders. This arrangement can lead to a stronger alignment of interests between the policyholders and the insurer, as profits can be returned to policyholders in the form of dividends or reduced premiums, instead of being distributed to external shareholders. This ownership structure ensures that policyholders have a say in the company's operations and decisions, fostering a sense of community and collective benefit among members.