Definition of mutual insurance company

Mutual insurance companies have no shareholders, and the status of policyholders is similar to that of shareholders of joint-stock companies, and the companies are owned by them. Mutual insurance companies have no capital and cannot issue stocks, and their operating funds come from premiums. The funds needed for the initial establishment of a company are generally raised by external means such as borrowing. Each member also participates in the company's surplus distribution and bears the compensation amount when the company loses according to the premium paid.