Zenith Indemnity was originally chartered in Ohio, where it issued non-participating policies and distributed profits to its private shareholders. Recently, Zenith underwent a complete corporate restructuring. Following the restructuring, Zenith is now entirely owned by its policyholders, who elect the governing board and may receive dividends as a return of excess premium. Concurrently, Zenith began writing specialized surplus lines coverage for clients in Indiana, despite not holding a Certificate of Authority from the Indiana Department of Insurance.
From the regulatory perspective of the state of Indiana, which of the following accurately classifies Zenith Indemnity's current status?
- A foreign, non-admitted mutual insurerAnswer
- BA foreign, non-admitted stock insurer
- CA domestic, non-admitted mutual insurer
- DA foreign, admitted mutual insurer
Answer
A foreign, non-admitted mutual insurer
Zenith Indemnity is classified as a mutual insurer because it is owned by its policyholders following the restructuring. It is considered a foreign insurer in Indiana because it was chartered under the laws of a different state (Ohio). Finally, it is classified as non-admitted (unauthorized) in Indiana because it operates there without a Certificate of Authority.
Step-by-Step Solution
Key Concept
Insurer Classification by Domicile, Authorization, and Ownership