Ace the 2025 Personal Lines Insurance Exam - Insure Your Success Today!

When an insurer becomes licensed to operate in a state, it is referred to as an admitted insurer. This designation indicates that the insurance company has met all the regulatory requirements set forth by the state, including obtaining the necessary licenses, registering its policies, and complying with state laws and regulations. As a result, admitted insurers are able to offer their products to consumers within that state, providing a level of security and oversight for policyholders since they are subject to state insurance regulations and protection mechanisms, such as guarantee associations.

In contrast, nonadmitted insurers typically operate without a state license and aren’t subject to the same regulatory scrutiny as admitted insurers. An unauthorized insurer also falls into this category, as it has not received approval to write business within the state. Furthermore, a domestic insurer is one that is incorporated or formed under the laws of the state in question, which is a different classification related to the insurer's incorporation rather than its licensing status.