What type of insurance company is owned by stockholders and does not allow policyholders to participate in dividends?

The correct choice is stock companies, which are insurance companies owned by shareholders or stockholders. In a stock company, the policies are underwritten with the goal of generating profits for the stockholders, who invest in the company by purchasing shares. One distinguishing characteristic of stock companies is that the policyholders do not have ownership rights; therefore, they are not entitled to participate in dividends issued by the company. Instead, any profits made by a stock company are distributed to shareholders in the form of dividends based on their ownership of stock.

In contrast, mutual companies are owned by policyholders who may receive dividends based on the company's performance. Private insurers can include various types of insurance companies but don't specifically denote ownership structure related to stockholders. Reciprocal exchanges involve groups of individuals or businesses who insure each other and do not operate under a stockholder structure, which also sets them apart from stock companies.