A mutual organization or society is a nonprofit entity incorporated under the principles of solidarity and mutual aid, in which some people join voluntarily to access services based on trust and reciprocity.
The partners of the fund contribute to the financing of the institution periodically. With the capital accumulated through mutual contributions, the entity provides services to those members who need them.
Some examples of services offered include mutual insurance and retirement plans through mutual welfare, covering accidents where entities, labor and management collaborate with social security.
The ‘mutual’ shares similarities with cooperative societies in that its members (and sometimes employees) are also its shareholders.
Thus, it differs fundamentally from a utility, a commercial company, a charity or humanitarian organization in that it provides any service, assistance or relief to its own members according to the extent of their participation.
A number of commercial insurance companies misuse the term to describe the supplementary mutual health insurance they sell.
On the other hand, mutualism is the historical and political movement which led to the creation of various forms of mutual or cooperative association in the areas of insurance, banking, construction, education, as well as in general forms of production or trade.
Mutuals are legal persons, subject to the provisions of the mutual code from the date of their registration with the National Registry. They survive through contributions paid by their members. And act in the interests of their members through acts of foresight, solidarity and mutual assistance, in accordance with their constitutions.
As a means of contributing to the development of cultural, moral, intellectual and physical aspects of their members and improving their living conditions.
The mutual philosophy involves the pooling of resources of each, in order to cope with any eventualities. This underlies a collection system that is independent of the financial risk to individual coverage, even if financial balance is necessary.
Mutual societies began in the mid-eighteenth-century in England, where small groups of individuals acquired the common commitment to support medical expenses or burial of its members.
Today, mutuality is conducted on other forms of compensation which include illness, accident, old age or death. Mutuals are related to the cooperative and the current microcredit institutions.
Because situations of precariousness and exclusion is steadily rising, including in developed countries, a new source of inspiration for solidarity is emerging, less materialistic and focused to benefit social activities. The emergence of state social security was based on the concerns about the future of mutuals, but they have over time managed to complement and extend the purpose of the same.