DEMUTUALIZATION

demutualization,n. The process of converting a mutual insurance company (which is owned

by its policyholders) to a stock insurance company (which is owned by outside shareholders), usu.

as a means of increasing the insurer’s capital by allowing the insurer to issue shares. • About half

the states have demutualization statutes authorizing such a conversion. [Cases: Insurance    1160.

C.J.S. Insurance § 111.] — demutualize,vb. [Blacks Law 8th]