Massachusetts State Life Insurance Practice Exam 2026 – The Complete All-in-One Guide to Exam Success!

In a stock insurance company, corporate shareholders are the owners of the company. These shareholders invest capital into the insurance company and in return, they have the right to vote on certain company matters, receive dividends, and profit from the company's financial success. The structure of a stock insurance company is similar to that of any publicly traded corporation, wherein ownership is represented by shares of stock.

This is in contrast to a mutual insurance company, where policyholders collectively own the company. In that model, policyholders may have the ability to vote on certain issues but do not hold shares in the same manner as shareholders in a stock company. The government does not own the company, and established mutual organizations function independently of stock companies. Understanding this distinction is crucial in discerning the different ownership structures present within the insurance industry.