Definition
An Alien Company refers to an insurance company that is incorporated under the laws of a country outside the United States. Despite being based internationally, these companies can operate within the U.S. after meeting specific regulatory standards prescribed by the state(s) they wish to operate in.
Registration and Compliance
To operate legally in any U.S. state, alien insurance companies must:
- Register with the state insurance department.
- Comply with all applicable state regulations tailored to ensure financial stability, consumer protection, and fair competition. This often includes compliance audits, providing proof of solvency and adherence to insurance claim and underwriting standards similar to those imposed on U.S.-based companies.
Examples of Regulations
NAIC Model Laws: The National Association of Insurance Commissioners (NAIC) provides model laws that many states adopt, which include provisions specifically addressing the operations of foreign insurers.
State Insurance Codes: Each state has its own set of laws regulating insurance activity. For instance, the California Insurance Code provides guidelines on how foreign insurers must conduct their business within the state.
