What type of insurance company is owned by the policyowners and directed by a board chosen by them?

The correct answer is mutual insurer. A mutual insurer is a type of insurance company that is owned by its policyholders. This structure means that the policyholders have a direct stake in the company, as they are essentially both customers and owners. Since they own the company, policyholders have the power to elect a board of directors to manage the company on their behalf. This board is responsible for making decisions and directing the company's operations in a way that serves the interests of the policyowners.

In contrast, a stock insurer is owned by shareholders, and decisions are made in the interest of these shareholders rather than policyholders. Fraternal insurers serve specific groups and often have a mutual structure, but they do not operate in the same way as typical mutual insurers. Government insurers are entities provided by the government and do not follow an ownership model based on policyholders. Understanding these distinctions clarifies why mutual insurers represent the option where policyholders own and direct the company through an elected board.