What defines a domestic carrier?

A domestic carrier is defined as an insurer that is based in the state in which it operates. In this context, the correct answer identifies an insurer that is established and licensed in California, which allows it to conduct insurance business within the state. This definition is crucial for regulatory and compliance purposes, as domestic carriers must adhere to California's specific insurance laws and regulations.

Insurers based in other states or countries are classified differently. Those based in another state are known as foreign carriers, while those based in another country are termed alien carriers. Understanding this distinction helps clarify how insurers are categorized based on their geographic location and the regulatory environment they operate under.