What defines a foreign insurer?

A foreign insurer is defined as an insurance company that is incorporated in a different state or territorial possession than where it is operating. This means that if a company is based in one state but sells insurance in another state, it is considered foreign in the state where it is selling the insurance.

This definition is crucial in understanding how insurance regulators categorize companies and ensures that these insurers comply with the licensing and regulatory requirements of the states in which they operate. States typically require out-of-state insurers to register and may impose specific regulations to protect consumers in their jurisdiction.

In contrast, the other options do not accurately reflect the definition of a foreign insurer. An insurer incorporated outside the United States would be classified as an alien insurer rather than a foreign one. An insurer defined by having no physical presence does not pertain to its incorporation status, and a cooperative insurer refers to a specific ownership structure rather than its geographic classification. Thus, the characteristics that define whether an insurer is foreign relate specifically to its state of incorporation relative to where it does business.