GENERAL KNOWLEDGE

Detailed explanation-1: -In full demutualization, the mutual company converts entirely into a public share company. Eligible policyholders will be compensated in the form of cash, newly issued shares of common stock, or policy credits in exchange for their membership interests.

Detailed explanation-2: -Some mutual insurance companies may choose to convert into stock companies; this process is known as demutualization.

Detailed explanation-3: -In a full demutualization, the mutual completely converts to a stock company, and passes on its own (newly issued) stock, cash, and/or policy credits to the members or policyholders. No attempt is made to preserve mutuality in any form.

Detailed explanation-4: -Demutualization is the process whereby a mutual insurer becomes a stock company. This is done to gain access to capital in order to expand more rapidly and increase profitability.