What does the term 'alien' commonly refer to in the insurance sector?

In the insurance sector, the term 'alien' typically refers to a non-local insurer, meaning a company that is incorporated or headquartered outside of the jurisdiction where the insurance is being offered. This designation helps in identifying the regulatory and legal context in which the alien insurer operates, as they follow the laws and regulations of their home country while providing coverage in another.

This term is important as it establishes the nature of the insurance provider, particularly in terms of their compliance with local insurance laws, the validity of their insurance policies, and the rights of policyholders. Understanding the status of insurers as alien entities is crucial for assessing the legitimacy and the regulatory framework under which they operate, especially in cross-border insurance scenarios.