MUTUALITÀ. — The concept of m. is closely connected with those of social provision and insurance. By m. is in fact understood, in the technical sense, the gathering of a group of persons subject to the same risk and united by an explicit or implicit agreement, on the basis of which the losses suffered by individuals as a result of the occurrence of the event associated with the risk in question are apportioned according to appropriate criteria among all the members. M. thus constitutes one of the two prerequisites on which the economic fact of insurance rests, while the other essential requirement for establishing the insurance relationship consists in the existence of a risk whose occurrence creates an economic need for the person affected.
The formation of a m. in the sense defined above may take place through a spontaneous agreement among individuals, in which case mutual associations arise; or it may result from the work of an entrepreneur who manages the insurance undertaking and gathers a sufficient number of persons to whom he guarantees indemnification upon the occurrence of the insured risks.
The methods by which the sums owed to those affected by the loss are apportioned among all the members of the group constituting the m. vary from case to case. In the earliest mutual associations, which arose as early as the time of ancient Rome (Collegia tenuorum) and subsequently developed during the Middle Ages, especially in the craft guilds, losses were very often apportioned at the moment when one or more members suffered the loss. Later, it was considered more expedient to require payment from the outset of an appropriate contribution (premium), in order to make provision for future indemnities, subject to the subsequent adjustment of the sums collected and the sums paid. Finally, when modern insurance undertakings arose, the system of the fixed premium prevailed, determined at the time the contract was concluded, with the undertaking bearing the adverse deviations in its operations resulting from the occurrence of a greater number of losses than anticipated. The adjustment principle nevertheless remains in force, albeit in a somewhat different form, in undertakings that have retained the mutual form.
As regards the methods on the basis of which premiums are fixed or burdens apportioned among the individual members of a given m., private insurance follows the general principle that each person must pay in proportion to the intensity of the risk pertaining to him. Thus, in life insurance, individuals will be required to contribute with due regard to age, while in fire insurance industrial buildings will be assessed at a higher rate than residential houses. This principle is set aside in compulsory social insurance, in which individual contributions are subject to different criteria and are often related to individual wages.
In a less technical and more general sense, the word m. denotes that broad movement of spontaneous association which, from the earliest times, has led to the establishment of the various forms of mutual societies, created to guarantee against the most diverse risks (old age, death, funeral expenses, illness, disability, unemployment, accidents, fires, livestock epidemics, hail, etc.). This term is therefore frequently used in opposition to the other forms in which insurance or, more generally, social provision may be administered (insurance undertakings in the strict sense, public institutions for private or social insurance, welfare institutions, etc.).
With the spread of modern ideas of social protection and social security and of the systems introduced for this purpose in the principal States, as well as with the evolution and improvement of private insurance undertakings, the mutualist movement—which in the past played a primary role as an encouragement and education in social provision and as a restraint on the speculations of unscrupulous entrepreneurs—now tends to assume more modest tasks, turning toward those forms of supplementary provision that concern particular groups or toward sectors still excluded from general social-provision systems.