What does it mean for an insurance company to be an admitted company?

An insurance company being classified as an admitted company means that it has received a license from the state insurance department to operate within that state. This licensing process ensures that the company complies with state regulations and meets specific financial requirements, providing consumers with certain protections. Being admitted allows the company to offer policies that are regulated under state laws, ensuring that they must adhere to standards regarding premium rates, policy forms, and claims handling.

This status contrasts with companies that may not be licensed in a particular state, which are often referred to as non-admitted companies. Non-admitted companies cannot offer policies that have the same level of regulatory oversight and may not be subject to the same consumer protections. Therefore, a licensed, admitted company provides greater reliability and security to policyholders, as it is fully recognized and regulated by state authorities.