How are Mutual Insurance Companies (Cooperatives) Formed?

Question

Are there government agencies they must go through to register, get loans or grants for getting started? Does it register the same way a corporation does or does it register the same as a cooperative (if they are different in the State)?

Answer 1

A mutual insurance company sometimes obtains initial capital from would-be policyholders but usually obtains it by borrowing money from investors. If the company is successful, borrowed money is ultimately repaid from the insurer's operating profits. Additional operating profits may be retained to finance future growth and provide a cushion against future liabilities. Insurance company management can also decide to share profits with policyholders in the form of policyholder dividends.

Mutual insurance company policyholders generally are not responsible for losses that exceed the insurance company's resources. However, some mutual insurers, known as assessable mutuals, preserve the right to assess policyholders to obtain additional funds if that becomes necessary for the insurer to meet its obligations. Such assessments typically are limited to one additional annual premium payment.

Fun fact the first mutual insurance company in American was the Philadelphia Contributionship for the Insurance of Houses From Loss by Fire, in 1752, by Benjamin Franklin.

Each state has a bureau of insurance who must approv all insurance products before being sold to the residents of their state.

That's about all I know.