Admitted and non-admitted carriers
An admitted carrier is licensed by the California Department of Insurance. Its rates and forms are filed with and reviewed by the department, and its policyholders are protected by the California Insurance Guarantee Association if the insurer becomes insolvent.
A non-admitted, or surplus lines, carrier is not licensed in the same way. It can write risks and use forms that an admitted carrier cannot, which is precisely why it can cover property the admitted market declines — but its policyholders have no CIGA protection.
Neither is inherently better. A non-admitted policy on a property no admitted carrier will write is a real policy from a real insurer. The trade is flexibility against the guarantee fund, and a broker placing surplus lines business must document a diligent search of the admitted market first.
Related terms
- Diligent search (surplus lines) — The documented effort to place a risk in the admitted market before going non-admitted.
- California FAIR Plan — The state-mandated insurer of last resort for property that cannot get coverage elsewhere.