Admitted Company
Definition
An Admitted Company is an insurance company that has been officially licensed and authorized by a state’s insurance department to conduct business within that state. This licensure means the company complies with all the state’s necessary solvency requirements and consumer protection laws.
Key Aspects
Licensure and Regulation: Admitted insurance carriers are strictly regulated and must follow state laws. They must prove financial stability and comply with specific standards set by the state’s insurance department.
Consumer Protection: Consumer-based benefits include access to a state guarantee fund. In the event of the inability of an insurance company to fulfill its obligations, this fund ensures policyholders are protected and claims are still paid out.
Operation Jurisdiction: Despite possibly being domiciled in a different state or country, an admitted company can do business in any state which grants it a license. The company needs to comply with local regulations and usually requires a separate license for each state.
Geographical Implication
An admitted insurance company that operates in multiple jurisdictions must adhere to the insurance regulations of each state, which ensures a uniform level of protection and solvency across different states.
References
- National Association of Insurance Commissioners (NAIC) guidelines - NAIC
- State Government Websites corresponding to the state’s insurance board for specific localized licensing information.
