If an insurer is not authorized to transact business in a state, what term describes its status?

If an insurer is not authorized to transact business in a state, what term describes its status?

• A. Non-Admitted
• B. Authorized
• C. Admitted
• D. Domestic

Answer: (A)

Not authorized to transact business in a state means the insurer does not have a certificate of authority to operate there. That status is called non-admitted. An admitted (authorized) insurer has that certificate and can write policies in the state, while domestic refers to where a company is organized (in-state), not its authorization. The non-admitted label also hints at differences in protections and how policies are placed (often via surplus lines) compared to admitted insurers.

Not authorized to transact business in a state means the insurer does not have a certificate of authority to operate there. That status is called non-admitted. An admitted (authorized) insurer has that certificate and can write policies in the state, while domestic refers to where a company is organized (in-state), not its authorization. The non-admitted label also hints at differences in protections and how policies are placed (often via surplus lines) compared to admitted insurers.