Understanding Admitted and Non-Admitted Insurance Companies
The term “admitted” simply refers to whether or not an insurance company has been licensed by a particular state. An insurance company can be admitted in State A, but non-admitted in State B.
Non-admitted insurance companies are not backed/approved by the state, which means:
- The company is likely not in compliance with the state’s insurance laws and regulations.
- Claims to the company may not be paid if the insurer goes insolvent.
- Policyholders who believe their claim was improperly handled have no ability to appeal to the state’s insurance department.
When an insurance company is admitted, it means:
- The company complies with all the state’s regulations on insurance.
- If the insurer goes insolvent, the state will pay outstanding claims at the time of insolvency.
How Fronting Companies Help in the Admitted vs. Non-Admitted Debate
As you may imagine, obtaining, and maintaining insurance licenses in multiple states can be expensive and difficult. For captive insurers (single-parent, group or rent-a-captive), obtaining these licenses drains the profitability of the parent company.
That’s where fronting companies, such as Benchmark Insurance Company, come in. At Benchmark, we are an admitted commercial carrier in 49 states (not New York) and the District of Columbia. Captives can partner with us to use our licensing to obtain fully compliant workers’ compensation and property and casualty insurance without investing the time or money in obtaining licenses, themselves.
Learn More About Our Services
We work with captives across the country to provide cost-effective insurance and related services that help protect your business. Contact a Benchmark Insurance expert by calling 800-283-0622 or contact us online today.