Metropolitan Life Insurance Co. does not consider its policyholders to be owners of the mutual company, the president of Metropolitan - the nation's second-largest insurance company - told a Senate subcommittee yesterday.

The executive, Richard Shinn, said the relationship instead is that of creditor and debtor.

Sen. Howard Metzenbaum (D-Ohio), chairman of the Judiciary Subcommittee on Citizens and Shareholders rights, called Shinn's statement "shocking." A staff member said later this was the first time any major insurance executive had made such a public admission.

The traditional view of a mutual company, which has no stockholders, is that the policyholders are, in theory if not in practice, the owners. Mutual companies began as cooperatives whose members insured each other. In contrast, stock insurance companies are owned by their shareholders rather than policyholders.

Yesterday's hearing was one of a series designed to explore whether the insurance industry should be regulated more closely by the states or possibly by the federal government. President Carter has called for minimum federal standards for participation and disclosure.

The hearing also emphasized that mutual insurance companies keep large cash surpluses beyond what is mandated by state laws or recommended by insurance commissions.

Using a Wharton School study comparing the largest companies' average dividend payment rates with operating income over 18 years' the subcommittee staff calculated that Metropolitan Life could have paid its 32 million policyholders $134 million more in dividends in 1976. Prudential, the largest company, could have paid $176 million more to its estimated 40 million policyholders. Instead, the money was used for other corporate purposes, including executives' bonuses as well as corporate expansion.

In addition, insurance companies were shown to keep large interest-free checking accounts in banks whose directors sit on their boards. Prudential had a $40 million balance with Morgan Guaranty Trust at the end of last year. Prudential President Robert Beck protested that the balance must have been boosted by some extraordinary item, he said the normal balance runs about $12 million. Shinn and Beck defended the balances as necessary for normal daily operations.

Last year, the combined assets of the two largest mutual insurance companies were $80 billion, exceeding the $60 million combined assets of the two largest industrials, Exxon and General Motors. Mutual insurance companies had $215 billion in assets compared with $198 billion for stock insurance companies. Yet mutual "owners" have little or no voice in corporate affairs, Metzenbaum noted. As a result, their insurance policies can be cancelled arbitrarily by company managers.

J. Hoyett Goggans, an insurance agent from Birmingham, Ala., testified that mutuals are "notorious" in cancelling agents. He cited the Holyoke Mutual Insurance Company's cancelling of every agent in Alabama and the Shelby Mutual Insurance Co.'s cancellation of $1 million in premium volume in 15 agencies within a year.

Robert Bridges, a Nationwide agent for 25 years in Manassas, said his clients included a milk trucker with no claims who was cancelled after 25 years, and a businesswoman not renewed after a divorce.

Control of a company by a management that is accountable only to a state insurance commission often staffed with yes-men is Metzenbaum's particular concern. Insurance executives claim policyholders are interested only in their contracts, not company management. "A piece of the rock" refers to a Prudential contract, rock" refers to a Prudential contract, not ownership, said Beck.

At Prudential's 1977 annual meeting, only 350 of more than 17.5 million eligible policyholders voted for directors. Alvin Alpert of the New York State Insurance Commission testified that, in 15 years, he had never heard of a policyholder nominating a director - until Lawrence Cohen.

Cohen took on Metropolitan Life in 1975 and lost. He was told he would need 23,000 policyholder signatures. The company refused to supply lists due to the cost, in excess of $8 million. (Shinn told the subcommittee Metropolitan has no master list and would have had to compile many lists.)

Finally the state insurance commission told Cohen he would have to prove mismanagement by Metropolitan's board before he could proceed. Deputy Superintendant Morton Greenspan said the mismanagement requirement (it is not a law) is to protect the company and the other policyholders from the costs incurred by individuals seeking a directorship for selfish or vindictive reasons.