Florida Life and Health Insurance License Practice Test

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Who is a mutual insurance company owned by?

  1. Its policyholders

  2. Its shareholders

  3. The government

  4. A private owner

The correct answer is: Its policyholders

A mutual insurance company is owned solely by its policyholders, who are also its customers. This structure allows the company to focus on providing the best insurance coverage and rates for its policyholders, rather than maximizing profits for shareholders or private owners. Option B is incorrect because shareholders only profit from the success of the company, while option C is incorrect as the company is not government-owned. Option D is incorrect because a private owner would have full control and ownership of the company, rather than it being owned by its policyholders.

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