West Virginia State Life Insurance Practice Exam

In West Virginia, an insurer that is licensed to operate in the state but is domiciled in New Jersey is called what?

1. Domestic company

2. Foreign company

3. Alien company

4. Non-resident company

The correct answer is: Foreign company

In West Virginia, an insurer that is licensed to operate in the state but is domiciled in another state, such as New Jersey, is referred to as a foreign company. This terminology originates from the classification of insurance companies based on their domiciliary status. A domestic company is one that is incorporated and operates in the same state where it is conducting business, meaning that its home office is in West Virginia in this context. An alien company, conversely, is one that is incorporated outside of the United States altogether, while a non-resident company generally refers to a company's operational status based on the location of the individuals operating it, not its state of incorporation. Thus, when a company is incorporated in one U.S. state (New Jersey, in this case) and operates in another (West Virginia), it is legally designated as a foreign company. This classification helps in understanding regulatory frameworks, taxation, and operational guidelines within different jurisdictions.