YOU ASK:

What is the definition of Domestic Insurance Company?

WE ANSWER:

A Domestic Insurance Company is a company which is incorporated in the state where it operates.

Domestic Insurance Companies are bound by the laws and insurance code of the state where it is incorporated. These companies are also required to get a license from the state insurance commission in order for it to be able to sell policies and do other business activities connected with the insurance business.

The state will usually specify the amount of capital and surplus for the domestic insurance company to get a license. There is also usually a nonrefundable filing fee and a yearly renewal fee for the insurance license to be released.

Other requirements include a business plan and a list of insurance lines to be written, the sales channels the company plans to use, as well as evidence that the company has the resources and technical expertise. This includes underwriting and actuarial expertise.

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