Why Are Some Mutual Insurers Referred to as "Assessment Mutuals

question 36

Multiple Choice

Why are some mutual insurers referred to as "assessment mutuals"?

• A)They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
• B)They are noted for being very thorough in their assessment of investment opportunities.
• C)They are assessed for state premium taxes only if they make a profit.
• D)They can assess policyholders if premiums are insufficient to pay losses and expenses.

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Definitions:

Mechanistic Structures

Organizational structures characterized by rigid hierarchies, strict rules, and centralized decision-making, typical in stable environments.

Organic Structures

Flexible and adaptive organizational structures that are characterized by decentralized authority, low levels of formalization, and high levels of horizontal communication.

Organisational Design

The process of structuring an organization's roles, responsibilities, and systems to achieve its goals and strategy effectively.

Loose-Tight Structure

An organizational approach that combines flexible, adaptive elements with strict, controlled processes to manage complexity.