In Florida insurance terminology, what is a domestic company?

Why A is correct

Under the Florida Insurance Code (Chapter 624, Florida Statutes), a domestic company is an insurer organized or incorporated under the laws of Florida. Domicile under Florida law, not the location of customers or sales territory, determines the domestic classification.

Why the other options are wrong

• B) An insurer formed under another state's laws is a foreign company in Florida.
• C) An insurer formed under a foreign country's laws is an alien company in Florida.
• D) Where an insurer sells does not matter; an insurer formed elsewhere that sells only in Florida is still foreign or alien.

Memory hook

Domestic = born in Florida (incorporated here).

Why B is correct

Under Chapter 624, Florida Statutes, an insurer formed under the laws of Florida is a domestic company, regardless of where it sells its policies. A company formed in another U.S. state is foreign, and one formed in another country is alien. Note that domestic status concerns only the place of organization, not licensure: a domestic company must still hold a certificate of authority from the Office of Insurance Regulation to transact insurance in Florida.

Why the other options are wrong

• A) A foreign company is organized under the laws of another U.S. state, not under Florida law.
• C) An alien company is organized under the laws of a country other than the United States.
• D) Unauthorized refers to the absence of a certificate of authority to transact business in Florida - a status that can apply to a domestic, foreign, or alien insurer alike.

Memory hook

Domestic = born in Florida.