How is a mutual insurance company primarily structured?

A mutual insurance company is primarily structured as being owned by its policyholders. This means that individuals who purchase insurance policies from the company are essentially part-owners of the company and have a direct stake in its operations. The policyholders have the right to vote on important issues, such as the election of the board of directors, which influences how the company is managed and the decisions it makes, including the distribution of profits.

This ownership structure differentiates mutual insurance companies from stock insurance companies, which are owned by shareholders who may not necessarily be policyholders. In mutual companies, any surplus or profits generated can be reinvested into the company or returned to policyholders in the form of dividends or reduced future premiums, aligning the company's interests closely with those of its policyholders.

The governance aspect, including having a board of directors, is a common feature found in both mutual and stock companies, but it does not define the ownership structure. Additionally, the aspect of being privately held by corporate entities does not apply to mutual insurance companies as they are not owned by corporate shareholders or a single entity.