USAA Licensing Practice Exam

An insurer that is defined as one domiciled outside the state where it writes business is known as a foreign insurer. This designation applies to insurance companies incorporated in one state but operating in another state. The term emphasizes the insurer's status regarding its home state relative to the states in which it conducts business.

In contrast, an alien insurer is one that is incorporated outside the United States but writes business in the U.S. A domestic insurer, on the other hand, is one that is chartered and operates within the same state. A local insurer is not a standard term within the context of these classifications and might refer to regional or small-scale insurers, but it does not accurately define the status of insurers regarding state lines.

Therefore, foreign insurer is the appropriate classification for an insurer operating in states other than its state of incorporation.