A mutual insurance company is an insurance company that is owned by policyholders. The sole purpose of a mutual insurance company is to provide insurance coverage for its members and policyholders, and its members are given the right to select management. Mutual insurance companies make investments in portfolios like a regular mutual fund, with any profits returned to members as dividends or a reduction in premiums. Federal law, rather than state law, determines whether an insurer can be classified as a mutual insurance company.
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