16. An insurer incorporated in another state has been licensed to operate in this state. In this state, the insurer would be considered a/an
Answer: D
An insurer incorporated in another state is considered a Foreign company.
When an insurer is incorporated in a different state but is licensed to operate in a specific state, it is classified as a foreign company in that state.
A) Alien company.
An alien company refers to an insurer that is incorporated outside of the United States. Since the insurer in question is incorporated in another state within the U.S., this option is incorrect.
B) Captive company.
A captive company is an insurance company that is wholly owned and controlled by its insureds, often created to provide coverage for the parent company’s risks. This definition does not apply to an insurer that operates in another state, making this option incorrect.
C) Domestic company.
A domestic company is one that is incorporated in the same state where it is doing business. Since the insurer is incorporated in a different state, it does not qualify as a domestic company, thus this option is incorrect.
D) Foreign company.
A foreign company is defined as an insurer that is incorporated in one state but authorized to do business in another state. Therefore, since the insurer is licensed to operate in a state different from its incorporation, this option is the correct classification.
Conclusion
The correct classification of the insurer as a foreign company is based on its incorporation in a different state than where it is licensed to operate. The other options—alien, captive, and domestic—fail to accurately describe the insurer's situation, confirming that D is the only suitable choice.