Life & Health Insurance Exam (National Portion)General InsuranceEasy
An insurance company, ABC Insurers, is incorporated in a state different from where it is currently conducting business. In the state where it is operating, ABC Insurers would be classified as what type of insurer?
- AAlien insurer
- BDomestic insurer
- CForeign insurer
- DAdmitted insurer
Show answer & explanationAnswer & explanation
Correct answer: C. Foreign insurer
An insurer operating in a state where it was not incorporated is classified as a foreign insurer. A domestic insurer operates in its state of incorporation, and an alien insurer is incorporated outside the U.S.
Why the other options are wrong
- A. An alien insurer is incorporated outside of the United States.
- B. A domestic insurer operates in its state of incorporation.
- D. An admitted insurer is simply authorized to do business, regardless of its origin.
Types of Insurers by Domicile
Insurers are classified based on their place of incorporation relative to where they are doing business: Domestic, Foreign, or Alien.
- Domestic: In-state.
- Foreign: Out-of-state but in-country.
- Alien: Out-of-country.
Memory trick: D.F.A. for Domicile, Foreign, Alien