Which type of insurance company raises capital by soliciting policy subscriptions from its members?

A mutual company is an insurance entity that operates on the principle of mutuality, which means it is owned by its policyholders. In this model, capital is raised by soliciting subscriptions from its members, who buy policies and become shareholders in the company. The main purpose of a mutual company is to provide insurance coverage primarily for its members, and any profits earned are typically returned to policyholders in the form of dividends or reduced premiums.

This structure contrasts with other types of insurance companies, such as stock companies, which raise capital by selling shares to investors rather than directly from policyholders. Alien companies, which are incorporated in a different country and operate in the U.S., do not inherently have a membership structure, and an assigned risk pool is a mechanism to provide insurance coverage to high-risk individuals, further differentiating it from the mutual company model. The mutual company's member-centric approach highlights its unique capital-raising strategy through policy subscriptions.