A domestic insurance company in South Carolina MUST be formed under what legal framework?

A domestic insurance company in South Carolina must be formed under the laws of South Carolina. This requirement is in place because a "domestic" insurance company is one that is incorporated and operates within the state. Each state has its own legal framework governing the formation, regulation, and operation of insurance companies, which includes guidelines on the licensing process, capital requirements, consumer protections, and the general conduct of insurance business within the state.

The formation of an insurance company under state laws ensures that it complies with specific local regulations that address the unique economic and social needs of that state’s citizens. This is essential because insurance regulations vary significantly from one state to another, and a domestic entity must adhere to the rules set out by the South Carolina Department of Insurance.

Other legal frameworks like federal regulations, international law, or the charter of the NAIC do not provide the necessary comprehensive legal structure required for the establishment and operation of a domestic insurance company in South Carolina, as they either apply at a broader or different jurisdictional level. Thus, compliance with state law is fundamental in ensuring that the company meets all requirements to operate legally and effectively within South Carolina.