Texas General Lines — Life, Accident, Health and HMOGeneral InsuranceHard
An insurance company based in Mexico is authorized to transact insurance business in Texas. For Texas regulatory purposes, how would this insurer be classified?
- AForeign Insurer
- BAdmitted Insurer
- CAlien Insurer
- DDomestic Insurer
Show answer & explanationAnswer & explanation
Correct answer: C. Alien Insurer
An alien insurer is an insurance company that is organized under the laws of a country other than the United States. Since Mexico is a foreign country, an insurer based there operating in Texas is classified as an alien insurer.
Why the other options are wrong
- A. A foreign insurer is organized under the laws of another state within the United States (e.g., a California-based insurer operating in Texas).
- B. An admitted insurer (or authorized insurer) is one that has been granted a Certificate of Authority to transact insurance in a specific state, regardless of its domicile.
- D. A domestic insurer is organized under the laws of the state where it is operating (e.g., Texas-based insurer operating in Texas).
Alien Insurer
An alien insurer is an insurance company that is organized under the laws of a country other than the United States, but is authorized to transact insurance business in a U.S. state.
- Organized outside the U.S.
- Must be authorized (admitted) to operate in a U.S. state
- Subject to state regulations where admitted
- Distinct from domestic (in-state) and foreign (out-of-state U.S.) insurers
Memory trick: Alien: 'A'lien, 'A'nother country.