Which of the following is a key characteristic of a non-admitted insurer?

A non-admitted insurer is characterized by the absence of a valid Certificate of Authority issued by the state. This means that they are not licensed to operate within that state's insurance market, which distinguishes them from admitted insurers who have met specific regulatory requirements and obtained the necessary approvals to conduct business.

The significance of not having a Certificate of Authority is that non-admitted insurers are often subject to different regulations compared to admitted insurers. They may offer coverage that might not be available through admitted carriers, particularly for high-risk or specialized insurance needs. However, this lack of formal state approval means that they do not benefit from certain consumer protections that apply to admitted insurers and generally have more flexibility in setting policy terms and pricing.

Being able to transact insurance in a state, being federally regulated, or being insured by the state reflects characteristics that either apply to admitted insurers or do not pertain directly to the operational status of non-admitted insurers. These distinctions help clarify the unique position non-admitted insurers hold within the broader insurance market.