Final Answer:
1) Policyholders and subscribers might receive dividends from a mutual insurer.
Explanation:
Mutual insurers operate on a different principle compared to stock companies. They don't have stockholders because they are owned by their policyholders and subscribers. Instead of paying dividends to stockholders, mutual insurers may distribute surplus funds among their policyholders and subscribers in the form of dividends. These dividends are a share of the profits made by the insurer.
Policyholders are individuals who have purchased insurance policies from the mutual insurer, while subscribers are members who have subscribed to the services or products offered by the mutual insurer. Both policyholders and subscribers contribute to the success of the insurer by paying premiums and, as a result, are eligible to receive dividends when the insurer generates profits beyond its operational needs and reserves.
The calculation of dividends can vary based on several factors such as the insurer's financial performance, claims experience, investment returns, and administrative expenses.
Typically, the surplus funds, which represent profits beyond the necessary reserves and operational costs, are distributed among policyholders and subscribers in proportion to the amount of business they have with the mutual insurer. This distribution mechanism ensures that those who contribute more to the insurer receive a larger share of the dividends.