CII M92 Practice Questions - Insurance Business And Finance (M92) Exam

What is the primary fundamental difference between a proprietary insurance company and a mutual insurance company?

A proprietary insurer is owned by shareholders seeking a financial return, whereas a mutual insurer is owned by its policyholders. A proprietary insurer is regulated by the PRA, whereas a mutual insurer is regulated solely by the FCA. A proprietary insurer cannot issue general insurance policies, whereas a mutual insurer can only issue life policies. A proprietary insurer is exempt from Solvency II capital requirements, whereas a mutual insurer is not.

Correct Answer:

A proprietary insurer is owned by shareholders seeking a financial return, whereas a mutual insurer is owned by its policyholders.

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