What is an 'admitted user' in the context of surplus lines insurance?

In the context of surplus lines insurance, an 'admitted user' refers to an insurer that is licensed to conduct business in a specific jurisdiction, such as Pennsylvania. This designation is significant because it denotes that the insurer complies with the local insurance regulations and is authorized to write insurance policies within that state.

Surplus lines insurance involves coverage from non-admitted insurers, which means they do not hold licenses in the state where the premium is collected. However, an admitted user is one that has met the state's regulatory requirements. This distinction helps ensure that policyholders have access to recourse avenues if issues arise with their coverage.

Understanding this definition underscores the relationship and regulatory framework between admitted and non-admitted insurers, critical in the surplus lines market, where certain coverages are needed but may not be available through standard admitted carriers.