There are many types of insurance companies that can be found in the United States. Companies found in the United States will have a specific type of legal structure. This is different than products that each company offers or sells to customers.
The most common type of insurance company found in all states is a domestic company. This is a type of company that has been incorporated in a specific state based on their laws of incorporation. When a company is domestic they are licensed to sell products in the state of incorporation.
A domestic company that obtains a license to sell insurance products in another state is called a foreign insurer. This is typical for a domestic company in one state that obtains a license to sell their products in another state. Many national insurance companies in the United States are a foreign insurer, such as State Farm and Allstate
Insurance companies licensed to do business in another country that obtain a license to sell products in the United States are called an alien insurer. This type of company is often found to be an life insurance company, such as a Canadian life insurance company. Alien companies in the United States should not be confused with a foreign insurance company.
Public insurance companies that are listed on financial markets or owned by shareholders are known as a stock company. Stakeholders in this type of company will be issued shares of stock or buy shares in a company on the stock market. A stock company may pay a dividend to shareholders. Public companies are able to raise additional capital for their business by issuing more shares of stock to investors.
Insurance companies that are owned by policy owners are called a mutual insurance company. This type of company does not have shareholders and may issue dividends. A more common option that a mutual company will offer is a reduction in premium. One benefit to policy holders is that these payments will not be taxed as they are seen as a return of premium. Mutual companies are members of the National Association of Mutual Insurance Companies.
You will also find insurance companies that are called an admitted company. This will be an insurance company that is subject to the laws and regulations in the state where they are admitted. States where a company is admitted will take over claim payments if an admitted company becomes insolvent.
Insurance companies that operate in various states may also be a non-admitted company. This in a type of company that is not subject to regulations and laws of the state. The state will not take over paying a claim for policies of a non-admitted company that is insolvent.
Insurance companies are also known a reinsurance company. This is a type of company that provides insurance to other insurance companies as a way to manage risk. Many insurance companies may be a provider of reinsurance. This includes a domestic company and a foreign company.