What is the Difference Between Domestic, Foreign, and Alien Insurers?
At times, the insurance world can feel like an enigma. With so many different types of insurance policies and insurers, it can get a little confusing. If you’re new to the insurance industry or hoping to brush up your knowledge, we’re here to help. Knowing the difference between domestic, foreign and alien insurers is essential. Let’s start by defining what each of these terms means.
A domestic insurer is an insurer that is licensed to operate in a specific state. The insurance company is admitted by and formed under the laws of that state in which insurance is written. To be a domestic insurer, insurance companies must follow the statutory laws and requirements of that state and operate its headquarters there.
A foreign insurer is an insurance company that is located in one state, but also writes policies for clients in other states. In effect, it is a domestic insurer doing business outside of the state in which it is domiciled.
An alien insurer is an insurance company that is located in one country, but also provides policies for clients in other countries. It is a domestic insurer doing business outside of the county in which it is domiciled.
Why Are There Different Types of Insurers?
Having different types of insurers is a benefit for policyholders. If they are unable to find coverage or afford coverage from domestic insurers, they can look to foreign or alien insurers for coverage instead. This allows policyholders to find the coverage that is best for them.
Regardless of an insurer’s location, it is still required to follow the statutory laws and requirements of the local government where it offers or sells policies.
- Domestic Insurer
- Foreign Insurer
- Alien Insurer
- Home State
- Admitted Carrier
- Non-Admitted Carrier/Excess & Surplus Lines (E&S) Carrier
- Non-Admitted and Reinsurance Reform Act (NRRA)
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