A Quick Shot: What Is an Alien Insurer?

Aug 08, 2022 By Susan Kelly


What Is an Alien Insurer? For-profit or non-profit, foreign insurance companies provide coverage in countries other than the company's home base. If the insurer is incorporated in a country other than the one where the policy is being sold, it is not an insurer from that country. It is considered "alien" if offered in a country other than the one where an insurance company's headquarters are located.

Foreign firms (or insurance companies from outside the country) purchase insurance because the risks they wish to cover are not provided by their local insurers or insurance companies in their respective states. This may be an unusual risk. It's not what "alien insurance firm" means to us Homo sapiens on Earth, even if extraterrestrials run insurance companies in distant galaxies. To put it simply, the US Insurance Information Institute refers to "foreign-based" insurance companies as those that are "incorporated under the laws of another country" rather than "foreign" insurance companies that operate in other states.

How Do You Go About Working With An Overseas Insurer?

Foreign insurers are insurance companies based in a different region and state or country and are therefore subject to the laws and regulations of that region or country. An insurer from a different country must change or even break away from the parent company to expand operations to a new country. This means that the country where an international insurance company operates determines its legal status. As long as it provides services to customers in the same country, it's considered a non-resident entity (NRE). Under the NRE rules, foreign companies can provide services to local customers without registering with local laws. According to the country's laws, they must be registered as an SRO to provide services to local customers and consumers. Access to local funding sources and benefits like tax breaks and legal protection when working with local officials will be possible.

Because most insurers are required to obtain a license from the country where they operate, the term "alien" is often used. To provide insurance services in another country, an insurer from another country must be granted the necessary license. A minimum capital amount and other conditions may be imposed by local law in the country where the business is located. A foreign insurance company must register with the regulatory authorities in its home country and submit reports regularly to operate in the United States. To conduct business internationally, a foreign insurance company may opt to obtain a license in each country where it intends to operate. Some companies choose this option because they want the most significant flexibility when establishing operations abroad. In contrast, others choose it because they need international markets but do not want to be licensed by the regulatory authorities in their home country.

Alien Insurer's Special Consideration

Regardless of where the insurer sells or provides policies, it must adhere to all applicable regulations and laws governing insurance practices. The same restrictions are imposed at various levels of government.

Foreign Insurer vs. Alien Insurance Company

When an agent represents an insurance company in an unincorporated state that is not the company's state of incorporation, it is considered a foreign insurer in the United States. Unlike an insurance company that may be based in another country but offers policies sold in the United States, this one is not an "alien." A foreign insurance company is based in the United States but sells policies in states other than where it is. If you live in one state but write policies for people from another, you're a "foreign insurer." Despite the prevalence of foreign insurers in the health insurance market, the concept of "state lines" prevents them from offering insurance products in just one state.

Insurers represented by an agency in a country other than the one registered are known as "foreign insurers." Unlike a foreign insurer that may be based in another country but offers coverage in the United States, this company is based in the United States. Many foreign insurance companies are based in the United States but provide coverage to customers in states where they are not. Both foreign and domestic insurers must adhere to the laws of the respective states in which they operate.


The insurance policies offered by an out-of-country insurer are sold outside of the country in which the insurer is based. Foreign insurance companies cater to those who cannot obtain insurance through a local provider because it is either too expensive or too complicated. Insurance for non-citizens is accurate, and it can be purchased in Florida. You should, however, read the fine print carefully before purchasing this policy. It's a good gift idea regardless of whether you need it or not, in all seriousness. Buying a life insurance policy from a company other than your own may result in a lower premium or more benefits. However, it's essential to know that working with these companies comes with some risks.

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