Every commercial insurance carrier is either admitted or non-admitted in a given state. Understanding the difference — and knowing when to use each — is fundamental to placing commercial accounts correctly.
An admitted carrier is licensed and approved by the state insurance department to write insurance in that state. Admitted carriers:
• Must follow state-approved rates and forms • Are subject to state guaranty fund protection (which pays claims if the carrier becomes insolvent) • Can be placed by any licensed agent without special surplus lines licensing
A non-admitted (surplus lines) carrier is not licensed in the state but is approved to write insurance for risks that the admitted market won't or can't cover. Non-admitted carriers:
• Can use their own rates and forms (more flexibility) • Are NOT covered by the state guaranty fund • Can only be placed by licensed surplus lines brokers after a diligent search of the admitted market
Surplus lines is appropriate when:
• The admitted market declines the risk (too many losses, unusual operations, hard-to-place industry) • The risk needs specialty coverage forms not available in the admitted market • The admitted market provides coverage but at unfavorable terms compared to surplus lines
Surplus lines is NOT appropriate just because it might be cheaper — agents must document that admitted markets were genuinely unavailable or inadequate.
Most states require agents to provide clients with a written disclosure when placing coverage in the surplus lines market. The disclosure typically states that:
• The carrier is not licensed in the state • The policy is not covered by the state guaranty fund • The state has not reviewed the rates and forms
AgencyAssist collects all the information covered here through a plain-English client intake link. No phone calls, no PDF forms, no missing fields — just a complete, submission-ready ACORD package.