A fraternal insurer is best described as:

A fraternal insurer is defined by its unique structure and purpose, which centers around providing insurance benefits specifically to its members through a nonprofit lodge or society system. These organizations often serve a dual purpose: offering insurance coverage and promoting social, charitable, and community activities among members.

Fraternal insurers operate on a nonprofit basis, meaning their primary goal is to provide for their members' needs rather than generating profit for shareholders. This contrasts sharply with for-profit entities, which focus on maximizing shareholder value. Additionally, fraternal insurers do not rely on stockholders for funding; instead, they gather resources through member dues, contributions, and premiums.

Furthermore, the scope of their services is typically limited to individuals rather than corporations, fostering a sense of community and support among their members. Therefore, the description of a fraternal insurer accurately characterizes it as an organization that provides insurance through a nonprofit lodge system specifically for its members, aligning perfectly with the correct answer.