A mutual, mutual organization, or mutual society is an organization An organization is a social arrangement which pursues collective goals, controls its own performance, and has a boundary separating it from its environment. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon (which is often, but not always, a company In the United States, a company is a corporation—or, less commonly, an association, partnership, or union—that carries on an industrial enterprise." Generally, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and any receiver, or business A business is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities. Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business) based on the principle of mutuality. Unlike a true cooperative A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit. Cooperatives are defined by the International Co-operative Alliance's Statement on the Co-operative Identity as autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and, members usually do not contribute to the capital In economics, capital, capital goods, or real capital are factors of production used to create goods or services that are not themselves significantly consumed in the production process. Capital goods may be acquired with money or financial capital of the company by direct investment, but derive their right to profits and votes through their customer A customer, also called client, buyer, or purchaser, is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services. However, in certain contexts, the term customer also includes by extension relationship.[dubious – discuss] A mutual organization or society is often simply referred to as a mutual.
A mutual exists with the purpose of raising funds Funding is to provide resources, usually in form of money , or other values such as effort or time (sweat equity), for a project, a person, a business or any other private or public institutions. When a request for funding is made then fundraising is being attempted from its membership or customers (collectively called its members), which can then be used to provide common services to all members of the organization or society. A mutual is therefore owned by, and run for the benefit of, its members - it has no external shareholders A mutual shareholder or stockholder is an individual or company that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company and are the members of the company by signing the memorandum of association . Thus, the typical goal of such companies is to enhance shareholder value to pay in the form of dividends Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be paid to the shareholders as a dividend. Many corporations retain a, and as such does not usually seek to maximize and make large profits In accounting, profit is the difference between price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses or capital gains A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor. Conversely, a capital loss arises if the proceeds from the sale of a. Mutuals exist for the members to benefit from the services they provide and often do not pay income tax An income tax is a tax levied on the income of individuals or business . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual.[1]
Profits made will usually be re-invested in the mutual for the benefit of the members, although some profit may also be necessary in the case of mutuals to sustain or grow the organization, and to make sure it remains safe and secure.
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Background
The primary form of financial business set up as a mutual company in the United States ^ b. English is the de facto language of American government and the sole language spoken at home by 80% of Americans age five and older. Spanish is the second most commonly spoken language has been mutual insurance A Mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders: this ownership either extends to all its policyholders or is restricted to certain classes of policyholders. Their ownership rights typically include voting rights, for instance in the election of the board of directors. Some insurance companies are set up as stock companies and then mutualized, their ownership passing to their policy owners. Under this idea, what would have been profits In accounting, profit is the difference between price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses are instead rebated to the clients in the form of dividend Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be paid to the shareholders as a dividend. Many corporations retain a distributions or reduced future premiums. This could be seen as a competitive advantage to such companies — the idea of owning a piece of the company could be more attractive to some potential clients than the idea of being a source of profits for investors.
However, the mutual form of ownership also has many disadvantages. The chief of them is that mutual companies must generate capital for growth internally — they have no shares to sell and hence no access to equity markets. Another shortcoming is the tendency of the management of such companies to act as if they were themselves the ultimate owners. While major decisions are technically subject to the vote of members, in fact very few members are cognizant of the daily operations of the company as would be outside investor groups such as mutual funds A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities . The mutual fund will have a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective. In the U.S., a fund registered with the or pension In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum funds. Further, without large shareholders exerting pressure to maximize profits, management has little incentive to control costs.
At one time, most major U.S. life insurers were mutual companies. For many years, the tax status of such organizations was open to dispute, as they were technically nonprofit A non-profit organization is an organization that does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Examples of NPOs include charities (i.e. charitable organizations), trade unions, and public arts organizations. Most governments and government agencies meet this definition, but in organizations. Eventually, it was agreed that federal taxation would be based on their share of business: for instance, in years in which mutual companies represented half of the business, they would be responsible for half of the taxes paid by the industry.
Many savings and loan associations A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include were also mutual companies, owned by their depositors.
As a form of corporate ownership the mutual has fallen out of favor in the U.S. since the 1980s. Savings and loan industry deregulation Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces. Deregulation does not mean elimination of laws against fraud, but eliminating or reducing government control of how business is done, thereby moving toward a more free market. It is different from liberalization, where and the late 1980s S&L crisis The savings and loan crisis of the 1980s and 1990s was the failure of 747 savings and loan associations (S&Ls aka thrifts). A Savings and Loan is a financial institution in the United States that accepts savings deposits and makes mortgage, car and other personal loans to individual members. The ultimate cost of the crisis is estimated to have led many to change to stock ownership, or in some cases into banks Banking is generally a highly regulated industry, and government restrictions on financial activities by banks have varied over time and location. The current set of global bank capital standards are called Basel II. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries. Many large U.S.-based insurance companies, such as the Prudential Insurance Company of America and the Metropolitan Life Insurance Company MetLife, Inc. is the holding corporation for the Metropolitan Life Insurance Company or MetLife for short. The firm was founded on March 24, 1868. For most of its life the company was a mutual organization, but it went public in 2000. The company is headquartered in the MetLife Building in Midtown Manhattan, New York City have demutualized Demutualization is the process by which a customer-owned mutual organization or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization. As part of the demutualization process, members of a mutual usually receive a "windfall" payout, in the form of shares in the successor company, a cash, with shares of stock being distributed to their policyholders to represent the ownership interest they formerly had in the form of their interest as mutual policyholders.
The Mutual of Omaha Mutual of Omaha is a Fortune 500 insurance and financial services company based in Omaha, Nebraska. The company was founded in 1909 as Mutual Benefit Health and Accident Association Insurance Company has also investigated demutualization, even though its form of ownership is embedded in its name. It is noted that other formerly mutual companies such as Washington Mutual Washington Mutual, Inc. , abbreviated to WaMu, was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States' largest savings and loan association until it became the largest bank failure in U.S. history, a former savings and loan association A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include, have been allowed to demutualize and yet retain their names.
The approximate British The United Kingdom of Great Britain and Northern Ireland[note 7] is a sovereign state located off the northwestern coast of continental Europe. It is an island country, spanning an archipelago including Great Britain, the northeastern part of the island of Ireland, and many small islands. Northern Ireland is the only part of the UK with a land equivalent of the Saving and Loan is the building society A building society is a financial institution, owned by its members, that offers banking and other financial services, especially mortgage lending. Building societies also went through an era of demutualisation in the 1980s and 1990s, leaving only one large national building society and currently 52 (Jan 2010) smaller regional and local ones. Significant demutualisation also occurred in Australia in the same era.
Cooperatives A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit. Cooperatives are defined by the International Co-operative Alliance's Statement on the Co-operative Identity as autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and are very similar to mutual companies. They tend to deal in primarily tangible goods and services such as agricultural commodities or utilities rather than intangible products such as financial services Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored. Nevertheless, banking institutions with close ties to the cooperative movement are usually known as credit unions A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a or cooperative banks Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world rather than mutuals.
Modern mutuality
Various types of financial institutions In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are highly regulated by government around the world are mutuals, and examples include:
- Asset management Investment management is the professional management of various securities and assets (e.g., real estate), to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via companies (most are not mutual)
- The Vanguard Group Vanguard is a United States investment management company that manages approximately $1 trillion in assets, based in Malvern, Pennsylvania. It offers mutual funds and other financial products and services to individual and institutional investors in the United States and abroad. Founder and former chairman John C. Bogle is credited with the - United States
- TIAA-CREF - United States
- Building societies A building society is a financial institution, owned by its members, that offers banking and other financial services, especially mortgage lending
- Nationwide Building Society Nationwide Building Society is the largest building society in the world. It has its headquarters in Swindon, England, and maintains a significant administration centre in Northampton. It is the only UK building society to clear its own cheques. Until mid-2009, when it announced the withdrawal of the service, it had been the only UK financial - United Kingdom, largest building society
- Cooperative banks Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world
- Credit unions A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a
- Friendly societies A friendly society is a mutual association for insurance, pensions or savings and loan-like purposes, or cooperative banking. Some friendly societies, especially in the past, served ceremonial and friendship purposes also, while others did not. It is a mutual organization or benefit society composed of a body of people who join together for a
- Mutual healthcare providers such as Benenden Healthcare Society - United Kingdom
- Mutual insurance A Mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders: this ownership either extends to all its policyholders or is restricted to certain classes of policyholders. Their ownership rights typically include voting rights, for instance in the election of the board of directors/assurance companies
- Current:
- Co-operative Insurance Society The Co-operative Insurance, formally Co-operative Insurance Society Ltd, is a large insurance company based in Manchester in the United Kingdom. It is one of the two main constituents of Co-operative Financial Services, which is in turn owned by Co-operative Group Ltd, formerly the Co-operative Wholesale Society - United Kingdom
- Gjensidige Gjensidige is a Norwegian insurance company organised as a mutual insurance company. Though the company has roots back to 1689 when the fire treasury at Nes was founded. Gjensidige in its present form was founded in 2003 when the insurance division of Gjensidige NOR was not made part of the merger with Den norske Bank. Gjensidige is a self-owning - Norway
- Liberty Mutual Insurance - United States
- LV= - United Kingdom
- New York Life - United States
- Northwestern Mutual Life - United States
- State Farm Insurance State Farm Insurance is a group of insurance and financial services companies. It is the largest automobile insurer in the United States continuously since 1942 and insures more cars and homes in the United States than any other insurer. The company also has operations in Canada - United States
- Former:
- Metropolitan Life - United States
- Principal Financial Group Principal Financial Group NYSE: PFG is a publicly traded corporation based in Des Moines, Iowa, USA - United States
- Prudential - United States
- Current:
- Mutual savings bank A mutual savings bank is a financial institution chartered through a state or federal government to provide a safe place for individuals to save and to invest those savings in mortgages, loans, stocks, bonds and other securities
- Savings and loan associations A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include
Some mutual financial institutions offer services very similar to (if not the same as) those of a commercial bank A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits. After the implementation of the Glass-Steagall Act, the U.S. Congress required that banks engage. In some markets, mutuals offer very competitive interest rates and fee tariffs on savings and deposit accounts, mortgages and loans. The members who save and borrow with the mutual ultimately own the business.
Conversion
A mutual may convert itself to a non-mutual through the process of demutualization. This process became increasingly common in the 1980s as a result of "Thatcherite" policies and ideology. In the United States, conversion may be full, to a public company, or, in many states, partial, to a mutual holding company.
References
- ^ Simpson, Steven D. Multistate Guide to Regulation and Taxation of Nonprofits. CCH, 2005. Print. ISBN 978-0808089308.
External links
- Are mutuals an endangered species? -- Swiss RE article on the result of demutualization activity.
- Report on the near collapse of the Equitable Life Assurance Society (Commissioned by the UK House of Commons, 2001)
Categories: Types of organization | Mutualism
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Leadership Management Mutual Agenda Opening Exercises
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As a participant in The Optmized Enterprise: Creating a More Competitive and Efficient Insurance . Organization. , you'll hear from top executives such as Mass . Mutual. CIO Bob Casale; Mike Clifton, CIO of The Hanover; and industry analysts ...
Q. Of course I thought I knew it all back then. I was young, idealistic, and more than willing to put my life at risk for my convictions. It was 1947 and I wasn't quite 18 when the Iraqi authorities caught me for smuggling young Iraqi Jews like myself out of Iraq, into Iran, and then on to the Promised Land of the soon-to-be established Israel. I was an Iraqi Jew in the Zionist underground. My Iraqi jailers did everything they could to extract the names of my co-conspirators. Fifty years later, pain still throbs in my right toe-a reminder of the day my captors used pliers to remove my toenails. On another occasion, they hauled me to the flat roof of the prison, stripped me bare on a frigid January day, then threw a bucket of cold water over… [cont.]
Asked by Trident R - Sun Jun 24 19:50:30 2007 - - 12 Answers - 2 Comments
A. No matter if in Iraq or other places. All people need respect. Remeber Lennon sing: IMAGINE. Imagine there's no heaven It's easy if you try No hell below us Above us only sky Imagine all the people Living for today Imagine there's no countries It isn't hard to do Nothing to kill or die for And no religion too Imagine all the people Living life in peace You may say, I'm a dreamer But I'm not the only one I hope some day You'll join us And the world will be as one Imagine no possessions I wonder if you can No need for greed or hunger A brotherhood of man Imagine all the people Sharing all the world You may say, I'm a dreamer But I'm not the only one I hope some day You'll join us And the world will be as one.
Answered by LUKE - Thu Jun 28 15:19:23 2007
