In surplus lines, what does the term "non-admitted" describe?

The term "non-admitted" refers specifically to an insurer that is not licensed to operate in a particular state. In the context of surplus lines insurance, this means that the insurer does not hold a license issued by the state's insurance department. Surplus lines allow for coverage through these non-admitted insurers, especially when coverage is unavailable through licensed insurers in the state.

This situation is particularly relevant for risks that are considered too high for traditional insurers, enabling brokers to seek insurance from companies that specialize in those types of high-risk situations. Non-admitted insurers may offer innovative coverage options that are not provided by admitted carriers, which are subject to state regulations and oversight.

Understanding this terminology is crucial in the field of insurance, as it highlights the flexibility and resources available for addressing unique or hard-to-place risks within the insurance marketplace.