Which type of insurer is referred to as authorized or admitted?

The designation of an insurer as authorized or admitted refers to its compliance with state laws and its licensing to conduct business within that state. When an insurer is authorized or admitted, it means that it has met all the regulatory requirements set forth by the state insurance department. This status allows the insurer to offer policies to residents in that state and to be subject to state regulation, which helps ensure that the insurer maintains financial stability and adheres to fair practices.

Insurers that are not licensed or authorized to do business in a particular state typically cannot sell insurance policies there, which protects consumers from unregulated practices. This compliance also involves meeting specific financial criteria, such as maintaining sufficient reserves and surplus to cover potential claims, thereby providing a layer of trust and security for policyholders.