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Mutual fund

An insurance company that brings in funds by selling its stock to the public. This money is then invested in other securities, and the value of the mutual fund changes based on the value of the investments in the portfolio. There can be two kinds: an open-end mutual fund, in which shares can be sold at any point, and closed-end, in which only the amount of shares originally authorized may be sold.

Mutual insurance company

A cooperative insurance company organized and owned by its insureds.
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US: An insurance company in which the ownership and control is vested in the policyholders and a portion of surplus earnings may return to policyholders in the form of dividends. No capital stock exists.
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UK: An insurance company owned by its policyholders, i.e. having no shareholders, formed by deed of settlement or registered as a company limited by guarantee. Funds are raised by premiums. The profits in life companies being shared among the policyholders usually as higher life insurance bonuses. An additional levy or call is imposed to meet losses if premium contributions are insufficient. Mutuals may be established for any class of business or they may be limited to members of a particular trade. Some former mutuals are now registered companies. Mutuals are often best known through Protection and Indemnity Clubs but are also found as the providers of professional indemnity cover for their members. See DEMUTUALISATION.

Mutual insurer

An incorporated insurer that does not have incorporated capital belonging to the policyholders. These companies do still provide the policyholders with dividends.
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Insurer with no capital stock, owned by Policyholders. Earnings over and above payment of losses and operating expenses and reserves are the property of the Policyholders. There are two types of Mutual Insurance companies. A non-assessable mutual charges a fixed premium and the policyholders cannot be assessed further. Legal reserves and surplus are maintained to provide payment of all claims. Assessable mutual are companies that charge an initial fixed premium and, if that isn’t sufficient, might assess policyholders to meet losses in excess of the premiums that have been charged.

Mutual insurer policy

Coverage written by an insurer that does not have incorporated capital belonging to the policyholders, although it is an incorporated insurer.
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Insurance issued by a mutual insurer. MW : Minimum Weight factor. Mysterious Disappearance : The vanishing of covered property that cannot be explained.

Mutuality of obligation

One of two irreducible minimum requirements before a contract of employment exists (Court of Appeal in Montgomery v. Johnson Underwood Ltd (2001) – an agency worker case) The Courts ruled that there must be an obligation on the employer to provide work and on the employee to accept it. One of the leading cases concerned waiters who worked at various catering functions. They did not work continually but would be telephoned and offered a particular job. The Court found that the employer did not have to offer them the work nor did they have to accept it. This meant they were not employees due to lack of mutuality of obligation. The second irreducible requirement is covered by the control test. See EMPLOYEE/EMPLOYER RELATIONSHIP.