What does it mean if an insurance company is 'admitted'?

When an insurance company is described as 'admitted,' it means that the company is licensed and authorized to conduct business in a specific state. This status allows the insurance provider to sell policies and offer coverage within that state's jurisdiction, ensuring compliance with local insurance laws and regulations.

Being admitted also implies that the company is subject to oversight by the state’s insurance department, which includes following established solvency requirements, maintaining reserves, and providing consumer protections. This regulatory framework helps to ensure that the insurance company is financially stable and able to meet its obligations to policyholders.

By contrast, companies that are not admitted may operate in some states without the same level of regulatory oversight, often leading to less consumer protection and fewer guarantees regarding the company’s financial health. This distinction is crucial for consumers when considering their options for insurance providers.