Discretionary Mutuals

A Discretionary Mutual pays claims at the discretion of its board. But without the demands of shareholders, the owner-members can expect that all valid claims will be paid - sometimes supporting the member even when outside the strict policy wording.

Discretionary mutuals do not have to be capitalised as much as an insurance company would be - and are not so heavily regulated. The discretionary concept is enshrined in the FSA Handbook and is based firmly on a precedent court case.

Hybrid Mutuals

A Hybrid Mutual combines the elements of a discretionary mutual with an added excess insurance policy sitting above – producing efficient results. It is regulated quite simply by the FSA as an intermediary.