How is the home state determined for an affiliated group?

The determination of the home state for an affiliated group is based on identifying the member with the highest premium percentage. This approach recognizes that within an affiliated group, premiums may vary significantly among members, and focusing on the member that generates the highest proportion of premiums provides a clearer indication of where the group's core business activities are concentrated.

This method helps maintain a consistent framework for regulation and taxation among groups operating in multiple states, ensuring that the state with the greatest financial interest in the group's operations is recognized as the home state. The choice of using premium percentage also allows regulators to establish clearer guidelines and minimize potential confusion surrounding compliance with surplus lines regulations.

Other options may suggest methods that could overlook the financial significance of individual members within the group or employ measures that do not accurately reflect the group's operational focus.