What term describes an insurance company incorporated in the state where it operates?

The term "domestic insurers" refers to insurance companies that are incorporated in the same state in which they conduct business. This designation is important in the context of insurance regulations, as domestic insurers are subject to the laws and regulations of the state in which they are chartered. By being locally incorporated, these companies typically have to comply with state-specific solvency requirements, standards for financial reporting, and consumer protection laws, allowing regulators to provide oversight and ensure the financial stability of the insurer.

In contrast, foreign insurers are those that are incorporated in a different state but operate within the state in question. Non-admitted insurers are companies that are not licensed to operate in a specific state, often providing coverage when standard insurance options are unavailable. Surplus lines insurers provide coverage for risks that are not typically covered by standard insurance policies, often using non-admitted insurers.

Understanding the nature of domestic insurers helps clarify their role and responsibilities within the state insurance framework, including how they interact with regulators and policyholders.