AD Banker Property and Casualty Practice Exam

Stock insurance companies are owned by stockholders, who invest capital into the company and, in return, receive shares of stock. This ownership structure allows stockholders to share in the profits of the company, which are typically distributed as dividends. The primary objective of these companies is to generate profit for their shareholders.

Policyholders, while they have a vested interest in the performance of the insurance company, do not have ownership rights in stock companies. They pay premiums in exchange for coverage but do not hold shares unless they also happen to purchase stock of the company separately.

Government entities are not involved in ownership of stock insurance companies; their role is generally to regulate the insurance market to ensure fair practices and consumer protection. Insurance agents serve as intermediaries who sell insurance policies, but they do not own the insurance companies themselves.

Understanding the ownership structure of stock insurance companies is key to grasping how they operate, how profits are managed, and how policyholder interests are balanced against shareholder expectations.