Admitted carriers refer to insurance companies that have been granted a license by a state’s insurance department to conduct business within that specific state. These carriers comply with the regulatory requirements and financial standards set by the state, providing a level of financial security and protection for policyholders.
The regulatory body within each state is responsible for overseeing and regulating insurance activities. It ensures that admitted carriers meet legal and financial standards to operate in the state.
An individual or entity that owns an insurance policy. Admitted carriers serve policyholders by providing coverage and honoring claims according to the terms and conditions outlined in the insurance policy.
Admitted carriers must adhere to the rules and regulations set forth by the state insurance department. This includes maintaining a certain level of financial stability, adhering to fair business practices, and regularly reporting their financial standing to the regulatory authorities.
Admitted carriers are required to meet specific financial benchmarks to ensure their ability to fulfill policyholder claims. These standards are established by the state insurance department to guarantee the carrier’s solvency and stability.
In contrast to admitted carriers, surplus lines insurance involves coverage obtained from non-admitted carriers. This is usually for risks that are deemed too high or unconventional for admitted carriers to underwrite.
The amount paid by the policyholder to the admitted carrier for insurance coverage. Premiums can be paid in various frequencies, such as monthly, quarterly, or annually, depending on the terms of the insurance policy.
The process by which admitted carriers assess and evaluate the risks associated with a potential policyholder before issuing an insurance policy. This involves analyzing various factors to determine the appropriate premium and coverage.
Admitted carriers may transfer a portion of their risk to reinsurers through a process known as ceding. This helps the carrier manage its exposure to large or catastrophic losses.
A fund established by the state to protect policyholders in case an admitted carrier becomes insolvent. This fund provides a safety net, ensuring that policyholders receive compensation for covered claims even if the carrier faces financial difficulties.