What does the term "non-admitted insurance company" mean?

The term "non-admitted insurance company" refers to an insurance company that operates without state approval or licensing in a particular state. This means that the company is not granted a license by the state's insurance regulatory authority to sell insurance products within that state. Non-admitted insurers are typically utilized for coverage that is not readily available in the admitted market, which is governed by more stringent regulations and requirements.

These companies often provide specialized or high-risk insurance products that may not be available from admitted carriers. Since they are not licensed, they do not have the same obligations in terms of rates, forms, and consumer protections that admitted insurers have, enabling them greater flexibility in their operations and offerings.

While the other options mention aspects of insurance licensing or reserves, they do not accurately define the status of a non-admitted insurance company. For example, an admitted company is one that is licensed and has regulatory oversight, while excess lines approval refers specifically to non-admitted insurers being eligible for certain types of specialized insurance, but does not fully capture the essence of what makes a company non-admitted.