New Jersey Life Producer Practice Exam 2025 – Your Complete All-in-One Guide to Exam Success!

An insurer owned by its policyholders is classified as a mutual insurer. This type of insurance company is organized for the benefit of its members, who are the policyholders. In a mutual insurer, the policyholders collectively own the company, and any profits that the insurer generates are typically returned to the policyholders in the form of dividends or reduced premiums. Because the policyholders have a direct stake in the company, they can also have voting rights on significant company decisions.

In contrast, a stock insurer is owned by shareholders, who may or may not be policyholders, and profits are distributed to shareholders rather than policyholders. A private insurer refers to a company that offers insurance for profit and can be either a stock or mutual insurer, but does not specifically denote ownership structure. A government insurer is typically state-owned and provides insurance services, often for programs like unemployment or workers' compensation, but not in the mutual ownership sense. Thus, the classification of an insurer owned by its policyholders is indeed a mutual insurer.