Which term describes an insurer domiciled outside the United States?

Which term describes an insurer domiciled outside the United States?

• A. Domestic insurer
• B. Foreign insurer
• C. Alien insurer
• D. Nonadmitted insurer

Answer: (C)

Insurers are categorized by where they are domiciled: inside the U.S. or outside. An alien insurer is one that is domiciled outside the United States, which is exactly the scenario described. A Canadian or other foreign company doing business in the U.S. would be considered an alien insurer. For contrast, a domestic insurer is domiciled in the same state where it operates, and a foreign insurer is domiciled in another state within the United States. Nonadmitted refers to licensing—an insurer that is not authorized to transact business in a state—not to where it’s domiciled.

Insurers are categorized by where they are domiciled: inside the U.S. or outside. An alien insurer is one that is domiciled outside the United States, which is exactly the scenario described. A Canadian or other foreign company doing business in the U.S. would be considered an alien insurer.

For contrast, a domestic insurer is domiciled in the same state where it operates, and a foreign insurer is domiciled in another state within the United States. Nonadmitted refers to licensing—an insurer that is not authorized to transact business in a state—not to where it’s domiciled.