Who elects the governing body of a mutual insurance company?

In a mutual insurance company, the governing body, typically a board of directors, is elected by the policyholders. This structure is fundamental to the mutual insurance model, which is established to serve the interests of its members rather than external shareholders. Policyholders have a vested interest in the company’s performance, as they are also the consumers of the insurance products offered. This allows them to have a say in the decision-making process, fostering a sense of ownership and accountability in the company's operations.

The involvement of policyholders in electing the governing body ensures that the leadership prioritizes the needs and welfare of the insured rather than focusing on generating profits for outside investors, which is a characteristic of stock insurance companies. In contrast, shareholders, insurance agents, and state regulators do not elect the governing body of mutual insurance companies, as their roles and interests differ from those of the policyholders who directly benefit from the services provided.