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

The primary factor that determines the type of insurer—whether it is classified as Domestic, Foreign, or Alien—is the location of business operations. Insurers are categorized based on where they are incorporated or established in relation to the state in which they are doing business.

A Domestic insurer is one that is established and operates under the laws of the state where it is licensed. Conversely, a Foreign insurer is one that is incorporated in one state but does business in another state. An Alien insurer, on the other hand, refers to an insurer that is incorporated outside of the United States but operates within the U.S.

Understanding this classification is crucial because it affects how insurers are regulated, taxed, and required to comply with state laws. Therefore, the location of business operations is the key determinant of an insurer's classification, making it the correct answer to the question.