What is the definition of 'independently procured insurance'?

Independently procured insurance refers to coverage that is directly obtained from a nonadmitted insurer, bypassing the traditional distribution channels that involve licensed agents or admitted carriers. This type of insurance is typically sought when specific coverages are unavailable from admitted insurers or when a business's risk profile is unique and does not fit standard market offerings.

Nonadmitted insurers operate outside the regulatory framework that governs admitted insurers, which means that they are not required to adhere to the same state regulations concerning rates and coverage. This allows businesses access to more flexible insurance options designed to meet their specific needs. Independently procured insurance is particularly relevant in scenarios where specialized risks are involved or when companies need larger limits of coverage.

The other options do not accurately capture this definition: insurance obtained through a licensed agent typically refers to policies from admitted carriers, while insurance obtained from an admitted insurer implies adherence to state regulations. The mention of group purchasing does not pertain directly to independently procured insurance, as this concept deals with collective purchasing rather than the relationship with insurers.