State RegulationsFL specificDifficulty 3/5
Two insurers apply for Florida certificates of authority: one is incorporated in Toronto, and the other is incorporated in Chicago. How are they classified in Florida?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Florida Insurance Code, classification depends on place of formation: the Toronto insurer, formed under the laws of Canada, a foreign country, is an alien company, while the Chicago insurer, formed under the laws of a sister state, is a foreign company. Neither is domestic, because neither was formed under Florida law.
Why the other options are wrong
- B) This reverses the definitions: sister-state formation is foreign, and foreign-country formation is alien.
- C) The Toronto insurer's foreign-country formation makes it alien, not foreign, in Florida.
- D) The Chicago insurer's sister-state formation makes it foreign, not alien, in Florida.
Memory hook
Toronto = alien; Chicago = foreign.