State RegulationsGA specificDifficulty 2/5
Which statement accurately describes a stock insurance company organized under Georgia law?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under O.C.G.A. § 33-14-2, a stock insurer is a corporation with capital stock owned by stockholders, who bear the investment risk and may share in profits; policyholders are customers without an ownership stake, so their rights rest on the contract rather than on ownership. The structure matters because dividends and control flow to the stockholders rather than to the insureds.
Why the other options are wrong
- A) That describes a mutual insurer, whose policyholders are the owners.
- B) Georgia does not form and operate insurers as arms of state government to provide low-cost coverage.
- C) Assessable policies allowing extra charges to members are characteristic of certain mutual or fraternal structures, not of stock companies.
Memory hook
Stock equals stockholders fund and own; policyholders just buy.