Admitted and non-admitted insurance carriers refer to two types of insurance companies that operate in different ways and are subject to different regulations.
An admitted insurance carrier is an insurance company that is licensed and regulated by the state government in which it operates. These companies must comply with state laws and regulations regarding solvency, financial reporting, policy forms, and rates. They are also required to participate in state guarantee funds, which protect policyholders in the event that the company becomes insolvent.
In contrast, a non-admitted insurance carrier is not licensed or regulated by the state government in which it operates. These companies are also known as surplus lines insurers, and they typically provide coverage for high-risk or hard-to-place risks that are not available from admitted carriers. Non-admitted carriers do not have to comply with state laws and regulations and are not required to participate in state guarantee funds. However, they are subject to oversight by the state insurance department, and they must file reports and pay taxes.
One key difference between admitted and non-admitted carriers is that policyholders of admitted carriers have greater protection in the event of an insolvency, as they are covered by state guarantee funds. On the other hand, non-admitted carriers may be able to offer more flexibility and customization in their coverage options, as they are not bound by state regulations.
Keep in mind
It’s worth noting that each state has its own rules and regulations regarding admitted and non-admitted carriers, so the specifics can vary depending on where you live and where the insurance company operates
If you have been in commercial real estate, trucking or any other niche vertical, you’ve likely become accustomed to working with non-admitted insurance companies. Hopefully this article helps clear up some of the questions of the main differences between the two. If you still have questions please do not hesitate to reach out to us.
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