Which statement best defines an alien insurer?

Which statement best defines an alien insurer?

• A. An insurer formed under the laws of this state.
• B. An insurer formed under the laws of any state or territory within the U.S.
• C. An insurer other than a domestic or foreign insurer.
• D. An insurer authorized to operate only abroad.

Answer: (C)

In insurance, insurers are categorized by where they are chartered relative to the United States: domestic insurers are formed under the laws of the state where they do business, foreign insurers are formed under the laws of another state or U.S. territory, and alien insurers are formed under the laws of a country outside the United States. The best description for an alien insurer is one that is not a domestic or foreign insurer—i.e., it is organized under the laws of a country other than the United States. The other options describe domestic or foreign status or imply operating only abroad, which isn’t how alien status is defined. An alien insurer may still transact business in the U.S. if admitted by state law, but its defining feature is its country of incorporation.

In insurance, insurers are categorized by where they are chartered relative to the United States: domestic insurers are formed under the laws of the state where they do business, foreign insurers are formed under the laws of another state or U.S. territory, and alien insurers are formed under the laws of a country outside the United States. The best description for an alien insurer is one that is not a domestic or foreign insurer—i.e., it is organized under the laws of a country other than the United States. The other options describe domestic or foreign status or imply operating only abroad, which isn’t how alien status is defined. An alien insurer may still transact business in the U.S. if admitted by state law, but its defining feature is its country of incorporation.