Types of Isurers
The insurance industry is a huge financial industry with over a thousand insurance companies operating in the United States today. Insurance companies are categorized according to how they are organized and operated. Stock Company A stock insurer is owned by a group of stockholders who are not necessarily policyholders. Shareholders or stockholders purchase shares of an insurance company’s stock. By owning company stock, the stockholders are allowed to participate in company earnings. Similar to most other publicly traded companies, if the insurer makes money, then the stockholders benefit with increased stock values and stock dividends (not the same as mutual company surplus dividends). In return, the shareholder pays taxes on those dividends as it is a return on their investment. In most cases a stock company does not yield any direct surplus monies (dividends) to policyholders, so they are considered a nonparticipating insurance company which issues nonparticipating (nonpar) polic