Term used by a state to refer to any company incorporated there.
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While an insurance company can conduct business in multiple states, it is known as a domestic insurance company in the state where it is incorporated. For example, State Farm’s incorporation is in Illinois. Therefore, in Illinois, State Farm is a domestic insurance company. In all other states where it operates, it is known as a foreign insurance company. Most states have additional financial and reporting requirements for a foreign company to ensure it is solvent and reputable.