MTHEL131 Lecture Notes - Lecture 3: Mutual Organization
13 Jun 2017
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6 step process: gather information, establish objectives, analyze information, develop the plan, implement the place, monitor/review. * over the last 4 years, difference between interest and inflate = +3. If both parties pass away, money goes to the estate -> determined by will. Two forms of life insurance companies: stock company, mutual company. Access to raise funds by creating new shares. If someone/company purchases 51% of your shares, they could potentially take over and put their own people on the board. Reasons why insurance company has more in reserve they need: number of people that died was less than expected, expected rate of return: higher than expected, company expenses are not as high as expected. If a stock company has a surplus, the surplus belongs to its shareholders. If a mutual company has a surplus, the surplus belongs to its policy holders. The money returned to policyholders is called experience dividend .
