What is an insurer that has a certificate of authority from the state called?

An insurer that holds a certificate of authority from the state is classified as an admitted insurer. This designation signifies that the insurer has received formal approval from the state’s insurance department to operate within that state. Admitted insurers are subject to the state's regulatory framework, which includes compliance with statutory requirements regarding premium rates, policy terms, and claim handling processes. This regulatory oversight aims to protect policyholders by ensuring financial stability and ethical business practices.

Additionally, admitted insurers benefit from certain protections, such as the ability to participate in the state’s guaranty fund, which provides coverage in the event that the insurer becomes insolvent. This structure is in contrast to unadmitted insurers, which lack such state approval and are not subject to the same regulatory scrutiny.

While the terms "licensed insurer" and "admitted insurer" are often used interchangeably because both indicate that the insurer is authorized to operate, the more specific term commonly used in the context of state regulations is "admitted insurer." The term "surplus insurer" refers specifically to those insurers that provide coverage for risks that are not typically accepted by admitted insurers, often because those risks are considered too high or unusual.