Mutual Insurance Company

An insurance company which is owned by its policyholders who formed an association for the purposes of insuring one another against the possibility of fortuitous loss. Each policyholder pays a premium for his or her own policy. If at the end of the fiscal year the mutual insurance company declares a profit, the profit is shared amongst all the policy holders. If the company declares a loss there is also a provision for the policy holders to be assessed a levy to make up for this shortfall.