Rhode Island Life Insurance Practice Exam

What type of insurance company is based in England but operates in Rhode Island?

1. Domestic

2. Foreign

3. Alien

4. International

The correct answer is: Alien

The correct answer is based on the classification of insurance companies according to their origin and the jurisdictions in which they operate. An insurance company is considered "alien" if it is incorporated or established outside of the country in which it is doing business. In this case, a company that is based in England and operates in Rhode Island falls into this category. In the context of insurance, a domestic company is one that is incorporated in the state where it is operating, so it would not apply to a company based in England. A foreign company refers to an insurer that is based in another state within the same country—in this instance, not suitable since England is not a part of the United States. The term "international" typically describes companies that operate across multiple countries but does not specifically address the status of the company in relation to state-level classification, which focuses more on domestic, foreign, and alien categories. Therefore, calling the company "alien" accurately reflects its operation in Rhode Island, while being incorporated in England.