An insurance company that is owned by policyholders is called a:

A company that is owned by its policyholders is known as a mutual company. In this type of structure, the policyholders actually hold the ownership of the company, and any profits made are typically reinvested into the company or returned to the policyholders in the form of dividends or reduced future premiums. This aligns closely with the concept of mutual ownership, where the interests of the policyholders are prioritized.

In contrast, stock companies are owned by shareholders, and the focus is often on maximizing profits for these shareholders rather than the policyholders. A domestic company is simply an insurance company that is incorporated in the state where it operates, without necessarily indicating the ownership structure. Fraternal organizations typically serve members of a specific group or association, and while they may provide insurance, they have different operational structures compared to mutual companies. Thus, identifying a mutual company as the answer reflects an understanding of ownership structures within the insurance industry.