All of the following are false regarding stock insurers, EXCEPT:

a. Stock insurers do not have a capital fund and are financially supported by policyholders.

b. Stock insurers do not pay dividends to stockholders, instead policyholders receive dividends as a return of overcharged premium.

(c.) Stock insurers are managed by a board of directors, who are chosen by the company stockholders.

d. A stock insurer may transform into a mutual insurer via the process of demutualization.

Answer: C

State Insurance

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