The Demotech Company Classification System categorizes insurers into one of eleven categories based on an analysis of data reported by the companies to the National Association of Insurance Commissioners. The eleven categories that comprise the system are Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and Companies with less than $1 million in direct written premium.
To be categorized as a State Specialist, a carrier must be an individual, active company reporting data to the NAIC using the P&C annual statement format at 12/31/2012. It must write at least $1,000,000 at 12/31/2012 with 90 percent or more in one state. Further, it cannot be a surplus lines company, risk retention group or reinsurance company.