Who can receive the surplus funds from a mutual insurer?

In the context of a mutual insurer, surplus funds are typically distributed among policyholders. This is because mutual insurance companies operate primarily for the benefit of their policyholders rather than for shareholders, as is the case with stock insurers. The fundamental principle behind mutual insurance is that policyholders are essentially the owners of the company. As such, when the insurer experiences financial success and generates surplus funds, these funds are often returned to the policyholders in the form of dividends or reductions in future premiums.

This distribution directly reflects the mutual nature of these companies, which emphasizes shared ownership and benefits among the members (policyholders) who contribute to the pool of funds from which claims are paid. The other options, such as board members, employees, or shareholders, do not typically receive profit distributions in a mutual insurer's structure because they do not hold ownership in the same way that policyholders do.