What is a characteristic of admitted insurance?

Admitted insurance is defined by its compliance with state regulations and oversight. This characteristic ensures that policies are subject to state controls regarding rates, forms, and practices, providing a layer of consumer protection and financial security. Admitted carriers are licensed by the state and must adhere to specific laws designed to maintain solvency and fair practices. This makes admitted insurance a reliable choice for consumers seeking stable coverage options.

The other options do not accurately reflect the nature of admitted insurance. While it can sometimes be more economical than surplus lines, price fluctuation is influenced by various factors, not a definitive rule. Admitted insurance generally caters to lower-risk markets rather than high-risk coverage, which is more typical of surplus lines. Finally, admitted insurers can be both domestic and foreign; they must be licensed to operate within the state’s jurisdiction, meaning that the premise of only foreign insurers providing admitted insurance is incorrect.