i believe its the two closest targets.

however, since theyre generally all on /follow or spread out in a formation, the distance from the healers to the CH target is nearly always exactly the same. this means that at the time my chain heal hits, the two clostest targets will receive the chain heals, leaving two characters with nothing.

i suppose its just one of those things you have to live with, with a shaman. my previous 5box setup was 4 priests and an MS warrior. using rank1 CoH i could spam guaranteed 2.5k instant group heals for almost no mana.