The uneven effects of laws across boundaries, when applied to persons or activities having nexuses to multiple jurisdictions, can often be neutralized by reciprocity—treating a non-resident in a particular jurisdiction the same way that a resident of that jurisdiction would be treated under identical circumstances by the laws of the non-resident’s home jurisdiction. In a regulated industry such as insurance, trends in reciprocity, including among the 50 states but also between the U.S. and other nations, can reflect broader political developments and illuminate consequential public policy debates in a key sector of the economy.
An insurer “domiciled” (incorporated) in one state can be licensed to carry on business not only in that state but in as many as 49 others and will be subject to the laws of each state in which it is so licensed. Many states have adopted insurance laws imposing reciprocal treatment with respect to specified matters on insurers domiciled elsewhere but doing business in the adopting state. Some instructive examples include:
