What does 'Domestic' mean in terms of an insurer's domicile?

The term 'Domestic' in the context of an insurer's domicile refers to a company that is incorporated within the same state in which it is operating. This means that the insurer is regulated by the state laws and the insurance department of that specific state. As such, a domestic insurer primarily serves clients within that state and adheres to the regulations that apply there.

In contrast, an insurer that is incorporated in another country would be referred to as 'alien', and if it were incorporated in another state, it would be termed as 'foreign'. The option for being out of business does not apply in this context, as it does not relate to the domicile status of an insurer. Therefore, being incorporated in-state directly aligns with the definition of a domestic insurer.