Tennessee Life Producer Practice Exam

In Tennessee, an insurer that is incorporated in New Jersey and conducts business in Tennessee is known as?

1. Domestic insurer

2. Foreign insurer

3. Alien insurer

4. Interstate insurer

The correct answer is: Foreign insurer

In Tennessee, an insurer that is incorporated in New Jersey and conducts business in Tennessee is classified as a foreign insurer. This designation is used for insurance companies that are established in another state, as opposed to those that are incorporated within Tennessee itself, which would be referred to as domestic insurers. The classification of a foreign insurer reflects the insurer's incorporation status in a different state while still being authorized to operate within the state of Tennessee. This term indicates that the insurer is not local (i.e., domestic) to Tennessee but is still allowed to conduct business there, complying with Tennessee insurance regulations and licensing requirements. In contrast, an alien insurer would be one that is incorporated outside of the United States, and an interstate insurer generally refers to companies operating across state lines but does not specifically address the state of incorporation. These distinctions are vital in understanding the legal framework within which insurers operate in Tennessee and other states.