In Louisiana insurance terminology, a company formed under the laws of another state is called a

• A. Domestic insurer
• B. Foreign insurer
• C. Authorized insurer
• D. Reinsurer

Answer: (B)

In insurance terminology, how an insurer is chartered determines how it’s labeled in a different state. If an insurer is formed under the laws of another state, it is considered a foreign insurer in Louisiana. This reflects its domicile outside Louisiana; domestic would mean it’s formed under Louisiana law, and alien would mean it’s chartered outside the United States. The term authorized refers to having a certificate of authority to transact insurance in the state, which is about regulatory permission rather than where the company was formed. A reinsurer is a company that takes on risk from other insurers, not a description of its domicile. So the correct term for a company formed in another state is foreign insurer.