Question 21

A company that is authorized to do business in a state is admitted.

A company that is authorized to operate within a particular state is referred to as "admitted." This status indicates that the company has met the necessary legal and regulatory requirements to conduct business in that state.

A) admitted

This option is correct because "admitted" specifically refers to a company that has received authorization to conduct business in a particular state, complying with state regulations and laws.

B) domestic

This option is incorrect as "domestic" refers to a company that is incorporated or formed within the state in question. While a domestic company may also be admitted, the term does not specifically indicate authorization to conduct business.

C) foreign

This option is incorrect because "foreign" describes a company that is incorporated in a different state than the one in which it is doing business. A foreign company must also seek admission to operate in the new state, thereby not indicating direct authorization.

D) mutual

This option is incorrect as "mutual" relates to a type of insurance company that is owned by its policyholders. It does not pertain to the concept of authorization to conduct business within a state.

Conclusion

The correct answer is "admitted" because it specifically denotes a company's status of being granted permission to operate within a state. Other options either describe different statuses or types of companies, failing to address the authorization aspect required by the question. Thus, "admitted" is the definitive choice.