In the context of surplus lines, what does "admitted" refer to?

"Admitted" refers to insurers that are authorized to operate within a particular state under the regulatory authority of that state's insurance department. These insurers comply with state laws, including holding required licenses and contributing to state guarantee funds to protect policyholders. This regulation ensures consumer protection and financial stability within the insurance market.

In contrast, non-admitted insurers, which are often involved in surplus lines, are not regulated by the state in the same way. They can provide coverage for risks that admitted insurers might deem too high or unusual, allowing greater flexibility in the types of insurance offered. The distinction is crucial for understanding the landscape of the insurance market, particularly in surplus lines, which often cater to unique or complex risks that may not be available through admitted sources.