What type of company is formed under the law of a state other than the state where it is licensed?

A company that is formed under the laws of a state other than the state where it is licensed is referred to as a foreign company. In the context of insurance, this term is used to distinguish between companies that are incorporated in the same state where they operate (domestic companies) and those that are established in a different jurisdiction.

When an insurance company is formed in one state and seeks to do business in another state, it must obtain a license to operate in that new state. This licensing process applies to foreign companies, highlighting their status as entities incorporated outside the state from which they seek authority to conduct business.

Domestic companies, on the other hand, are those that are incorporated and licensed in the same state. An island company and an international company do not represent standard categorizations in the context of U.S. insurance law, which further solidifies the definition of a foreign company as the correct choice in this scenario.