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"Which of the following statements regarding mutual insurers is TRUE? A) Mutual insurers issue participating policies. B) If a mutual insurer is profitable, it may issue taxable dividends to its policyholders. C) The board of directors oversees the operations of the company. D) Mutual insurers are also known as reciprocal insurers."
"Which of the following statements regarding mutual insurers is TRUE? A) Mutual insurers issue participating policies. B) If a mutual insurer is profitable, it may issue taxable dividends to its policyholders. C) The board of directors oversees the operations of the company. D) Mutual insurers are also known as reciprocal insurers."
Final answer:Mutual insurers issue participating policies, they may issue taxable dividends if profitable and their operations are overseen by a board of directors but are not to be confused with reciprocal insurers.Explanation:In the field of insurance, the nature ofmutual insurersis often misunderstood. Among the provided options, the true statements are: A) Mutual insurers issue participating policies, B) If a mutual insurer is profitable, it may issue taxable dividends to its policyholders, and C) The board of directors oversees the operations of the company. However, D) Mutual insurers are not the same as reciprocal insurers.Mutual insurers are owned by their policyholders who are, in essence, the company's shareholders. When a mutual insurer has excess earnings, they return part of those earnings to policyholders in the form ofdividends, which can be taxable. The operations of a mutual insurer are overseen by aboard of directorselected by the policyholders. Reciprocal insurers, on the other hand, are insurance entities composed of a group of people, or subscribers, who exchange insurance responsibilities among themselves and each member could be considered an insurer.Learn more about Mutual Insurers here:brainly.com/question/10873841#SPJ11...