What factor primarily determines the type of insurer (Domestic, Foreign, or Alien)?

The primary factor that determines whether an insurer is classified as Domestic, Foreign, or Alien is the location of its business operations. A Domestic insurer is one that is incorporated and operates within the same state where it is licensed. Conversely, a Foreign insurer is incorporated in a different state but operates within the state where it is providing insurance. An Alien insurer, on the other hand, is incorporated outside of the United States and does business within the U.S.

This classification is crucial because it influences how the insurer is regulated and taxed. The state’s regulatory authority typically has jurisdiction over Domestic insurers, whereas Foreign and Alien insurers are subject to differing regulations based on the laws of their home states or countries. Therefore, the geographical location of operations directly impacts how an insurer is categorized and the associated regulatory requirements.