A company that is licensed to conduct business in Alabama but is domiciled in another state is known as:

Study for the Alabama Life and Health Insurance State Exam. Prepare with flashcards and multiple-choice questions, each question offers hints and explanations. Build your confidence for success!

A company that is licensed to operate in Alabama but is domiciled in another state is referred to as a foreign admitted company. This term is used in insurance to describe firms that are established in one state (or country) but are authorized to conduct business in another. In the context of insurance, 'domiciled' refers to the state where the company is incorporated or primarily operates.

When a company seeks to do business in a different state, it typically must apply for and receive a license to operate there. This process is known as 'admission,' and once a foreign company secures the necessary approvals, it is considered an admitted company in that state. Such companies are subject to that state’s insurance regulations and can offer coverage to residents.

The other terms are specific to different contexts: a domestic company operates in the state where it is incorporated; an alien company is one that is based outside the United States but conducts business within it; and a non-admitted company refers to one that does not have permission to sell insurance in a particular state, meaning it does not comply with the local licensing requirements. Understanding these distinctions is crucial in grasping how insurance markets operate across state lines.

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