What is the difference between a Licensed insurer and a Non Admitted insurer (also known as surplus lines insurer)?
Every State in the United States differentiates between the two types of insurer. Non admitted insurers accept risks that Licensed insurers will not. This may be because the risk is too hazardous for the Licensed insurer to accept or there have been too many claims. Because Non Admitted insurers are willing to insure these more difficult situations they are granted certain exceptions that apply to Licensed insurers. For example they are not required to get approval for the policy forms that they use or the premiums that they charge. They are also exempt from rules concerning the cancellation or non renewal of policies.
