State RegulationsTN specificDifficulty 2/5
An insurance company is organized under the laws of another country and holds a license to write coverage in Tennessee. How is the company classified under Tennessee insurance law?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
T.C.A. § 56-1-102 classifies insurers by jurisdiction of formation: a company formed under the laws of another country is an alien insurer, even though it may be fully licensed and authorized in Tennessee. Domestic means formed in Tennessee, and foreign means formed in another state of the United States — the company's valid Tennessee license does not change its classification.
Why the other options are wrong
- A) Only a company formed under Tennessee law is domestic, regardless of where it does business.
- B) Foreign status belongs to companies formed in other U.S. states; a company formed in another country is alien.
- D) Reciprocal describes an ownership structure for exchanging insurance contracts among subscribers, not a jurisdiction-of-formation classification.
Memory hook
Born abroad, licensed here — an alien insurer in Tennessee.