Ask "who owns this company, and who gets the profit?" The answer tells you the insurer's form.
Stock insurer: owned by its stockholders.
Mutual insurer: owned by its policyholders, who are its members.
Fraternal benefit society: a nonprofit, lodge-based society without capital stock.
Reciprocal: an exchange whose subscribers are its own insureds; they insure one another through the exchange.
Demutualization is the process by which a mutual insurer becomes a stock insurer. Ownership moves from the policyholder members to stockholders. Section 11535 allows a mutual to do this through a plan that meets the Insurance Code's requirements. Do not confuse it with liquidation, which closes the company.
A risk retention group (RRG) is a group of businesses that insure their own liability under the federal Liability Risk Retention Act. The Act lets the chartering state regulate the group and largely exempts it from other states' insurance laws. Other states keep limited powers, such as applying their unfair claims settlement laws. An RRG provides liability coverage only, so it cannot cover members' homes or personal cars.
The consumer impact: an RRG is barred from state guaranty associations, and each RRG policy must carry a notice that state insolvency guaranty funds are not available. If the group fails, members have no guaranty fund to fall back on.