State RegulationsTN specificDifficulty 3/5
An insurer chartered under the laws of Georgia is duly licensed to write business in Tennessee. How is this insurer classified in Tennessee, and why is it not "alien"?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under T.C.A. § 56-1-102, the classification turns on the jurisdiction that formed the insurer: companies formed in other states of the United States are foreign insurers, while only companies formed under another country's laws are alien insurers. A Georgia-chartered insurer that is properly licensed in Tennessee is an authorized foreign insurer, fully able to write the business its license permits.
Why the other options are wrong
- A) Licensure and active writing do not make an insurer domestic; domestic status depends on being formed under Tennessee law.
- C) Having a home office outside Tennessee does not make an insurer alien; alien status requires formation under another country's laws.
- D) A Georgia-chartered insurer that is licensed in Tennessee is authorized; foreign insurers can be fully authorized to write Tennessee business.
Memory hook
Other state equals foreign, other country equals alien, Tennessee equals domestic.