Insurance Contract Types and Valuation Principles
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Mutual vs. Commercial Insurance Contracts
According to Article 124 of the Commercial Code (C. Com), mutual insurance companies, fire tontines, life combinations to assist the elderly, and any other class, are considered businesses and remain subject to the provisions of this Code when engaged in acts of foreign trade to the mutual fund or corporation, thereby becoming a fixed premium entity. This section highlights the difference between insurance contracts entered into with a public limited company (SA) and those concluded with mutual organizations.
It is crucial to distinguish between fixed premium mutuals and variable premium mutuals. These represent different social forms, primarily based on mutual responsibility:
- In the first case (fixed