Surplus Lines
Coverage placed with non-admitted insurers for risks admitted insurers will not write, placed through licensed surplus lines brokers subject to state rules.
Drill all 803 terms as flip-card flashcards in the Exam Engine →
Practice This Concept
An insurer that holds a certificate of authority issued by the California Insurance Commissioner to transact insurance in this state is called:
An admitted insurer — An admitted insurer is one that has been granted a certificate of authority by the California Insurance Commissioner, authorizing it to transact insurance in the state and making it subject to the Commissioner's regulation and to the protections of the state's guaranty fund system. Insurers must be admitted to sell through licensed agents in the ordinary market. A nonadmitted insurer lacks that certificate; surplus lines insurers are nonadmitted insurers accessed only through the surplus line market, and a captive insurer is one owned by the risk it insures. The certificate of authority is the definitive mark of admission, and an agent's authority to place business depends on the insurer holding it.
CA-specific example
An insurer that has been granted a Certificate of Authority by the California Insurance Commissioner to transact insurance in the state is called a(n):
Admitted (authorized) insurer — An admitted insurer, also called an authorized insurer, has obtained a Certificate of Authority from the Commissioner and is permitted to transact insurance in California. Admitted insurers must meet the state's capital, solvency, and conduct requirements and are covered by the state's guaranty associations. A nonadmitted insurer has not been authorized and can be used only through the surplus lines market. The distinction protects consumers by directing business toward regulated, financially supervised companies.
CA-specific example
Practice all general insurance questions →