What type of insurance company is directed by officers and directors with owned capital stock?

A stock insurance company is one that is created and operated for the purpose of generating profit for its shareholders. In this type of organization, the company is owned by investors who purchase shares of capital stock. The officers and directors are responsible for managing the daily operations and are typically appointed from among the shareholders. This structure allows stock insurance companies to raise capital through the sale of stock, enabling them to cover claims and operate effectively.

In contrast, a mutual insurance company is owned by its policyholders rather than shareholders, with profits typically distributed back to policyholders in the form of dividends or reduced premiums. A captive insurance company is established to insure the risks of its parent company, and a reciprocal insurance company involves members who provide insurance to one another. Each of these alternatives has a different ownership and governance structure, which distinguishes them from stock insurance companies. The correct answer, therefore, reflects a clear understanding of the ownership and operational dynamics of stock insurance companies.