Mutualization

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Mutualization

A change of a company's structure to one in which the company's owners are also its clients. That is, once mutualization occurs, the company's profits are distributed to its participating customers each year in proportion to their individual exposures to the company. Many insurance companies are structured as mutual companies, meaning that policyholders have the right to receive portions of the company's profits, and often may elect the company's management. Savings & loan associations are also commonly structured as mutual companies. See also: Demutualization.
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