An admitted carrier holds a license from a state’s department of insurance to write a given line in that state. In return for the license, it accepts the state’s regulation: rate and form filings (the rules vary by state and line), market conduct exams, solvency oversight and participation in the state’s guaranty association. If an admitted carrier becomes insolvent, the guaranty fund pays covered claims up to a statutory cap.
A non-admitted carrier isn’t licensed in the state where the risk is located. It can still insure that risk, but only through a licensed surplus lines broker and under the state’s surplus lines rules. Non-admitted carriers have more freedom on rates and forms and usually aren’t backed by the guaranty fund.
How it shows up in an agency
Most agencies try the admitted market first. A habitational account with older wiring, or a contractor doing roofing work, might get declined by every admitted carrier the agency is appointed with. The producer then sends it to a wholesaler, who places it with a non-admitted carrier. The agency has to collect the surplus lines tax and any stamping fee, and the client often faces a minimum earned premium if they cancel.
Common confusion
- Admitted doesn’t mean better. Many non-admitted carriers are large and highly rated. “Admitted” describes the regulatory status in one state, not the carrier’s financial strength. Check the AM Best rating separately.
- Status is per state, and sometimes per line. A carrier can be admitted in Ohio and non-admitted in Florida, or admitted for auto but not for property in the same state.
- Diligent search rules. Many states require proof that admitted carriers declined the risk before it goes to surplus lines. Keep the declinations in the file.
Browse carriers by line on our carrier pages.