Mutual Companies

Mutual Companies

• 1993 – SOA – The Dilemma for Mutual Companies, rsa93v19n216 – Society of Actuaries – 18p

• JAMES R. THOMPSON: Mr. Hertz mentioned that mutuals are using subsidiaries for new products. Could you give me specific examples?
• MR. HERTZ: A number of mutual companies are using subsidiaries to market Universal Life, Variable Life, indeterminant premium products–products essentially on which the question of policyholder dividends is a live issue.
  • At a mutual company, whether any one product has a dividend or not is irrelevant. Under the 1959 act, a mutual company is hopelessly a Phase I taxpayer.
  • If you are going to write non-par business, you want it written in a subsidiary where it can have the tax benefits associated with that kind of business.

1983 – SOA – Strategic Tax Planning, rsa83v9n122 – Society of Actuaries – 8p