Final answer:
A domestic insurer is a company that is incorporated and operates in the same state it offers insurance services, as opposed to foreign or alien insurers.
Step-by-step explanation:
An insurer incorporated under the laws of the state in which it is operating is considered to be a domestic insurer. The term 'domestic' in the context of insurance refers to a company that is incorporated and operates in the same state it offers insurance services. This is opposed to a 'foreign' insurer, which is a company that is incorporated in one state but operates in another, or an 'alien' insurer, which refers to a company that is incorporated in a country outside of the United States but does business within the United States.