What defines an admitted insurer?

An admitted insurer is defined as an insurance company that has received a Certificate of Authority from a state regulatory authority, allowing it to legally transact insurance business within that state. This certification ensures that the insurer complies with the state's insurance laws and regulations, which include solvency standards, consumer protection mandates, and the ability to pay claims.

When an insurer is admitted, it is also subject to the state’s regulatory oversight, which provides additional security to policyholders, as it ensures that the insurer follows legal guidelines in its operations which protects the interests of consumers in that jurisdiction. This is significant as it provides a layer of reassurance for policyholders, knowing they are dealing with companies that are recognized and regulated by state authorities.

In contrast, insurers that do not have this certification are considered non-admitted and are often subject to different regulatory frameworks, which can include less oversight. Thus, the key aspect of the definition of an admitted insurer centers around the possession of this Certificate of Authority, highlighting the company's authorization to operate legitimately within the state.