Full Definition
Admitted carriers are insurance companies licensed by the state insurance department, subject to rate and form regulation, and members of the state guaranty fund (which protects policyholders if the carrier becomes insolvent). Non-admitted carriers (surplus lines carriers) are not licensed in the state, not subject to rate regulation, and not covered by state guaranty funds. The tradeoff: admitted carriers provide guaranty fund protection but less flexibility; non-admitted carriers provide flexible coverage for unusual risks but without guaranty fund backing. Financial strength ratings (A.M. Best, S&P) become especially important when evaluating non-admitted carriers.
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