We receive frequent questions about the differences between admitted and non-admitted insurance carriers.

When deciding between the two, we recommend fully educating yourself on the pros and cons of both options before making coverage decisions.

The main difference between admitted and non-admitted insurance companies concerns the regulations they must follow. As a result, they tend to focus on different areas of the market.

Having an understanding of the key differences between admitted and non-admitted insurance companies can save you time – and point you in the right direction as you investigate options.

Admitted Insurance Carriers

An admitted insurance carrier (a.k.a. standard market carrier) must be approved by the state insurance department. They are required to file the forms and rates with each state in which they want to do business to get approval before proceeding.

Once the forms and rates are filed and approved, the carrier is backed by the state guaranty fund, and all insureds would be afforded protection should the company become insolvent.

Admitted insurance carriers are also required to follow all state regulations for insurance. Every admitted insurance company is rated for its stability. Ratings can range from A++ to F – just like a school student. The higher the rating, the better the financial situation of the carrier.

If an admitted company should fail financially, the state would step in to make payments on claims as necessary through the guaranty fund. 

Non- Admitted Insurance Carriers

A non-admitted insurance carrier (a.k.a. E&S, Surplus Lines) is regulated by the state surplus lines department, but these regulations are less stringent than those of the admitted markets are.

Because a non-admitted carrier does not have to file their forms and rates with the states, they have the ability to write unique and hard-to-place classes by adjusting the forms and rates to give the coverage needed.

In order to write business with a non-admitted carrier, you must have a surplus lines license for the state that the insured is located in and file the required taxes and fees according to state guidelines.

If you do not have a surplus lines license, you must work with a broker that can handle the filings for you. Non-admitted carriers are also rated for their stability. While they are not backed by the state guaranty fund, they are required to set aside large reserves or to secure re-insurance to make sure claims can be paid. 

Bottom line:  whether an insurance carrier is admitted or non-admitted, coverage can be found for virtually all classes of business.

At Rockwood, we are a surplus lines producer in all 50 states and can file taxes and fees on behalf of our agents – or help you obtain terms with an admitted carrier.

All of the carriers we write business with are rated A or better by A.M. Best for both admitted business and non-admitted business!

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Sharon Beal has been in the insurance industry since 1999, working in various capacities over the years. Sharon joined Fox Point Programs in 2013 as an underwriter, and enjoys helping her clients secure the best coverage possible for their industry. Everyone agrees that Sharon is very personable and can get along with anyone, even going above and beyond to help clients and friends.