What defines an admitted insurer?

An admitted insurer is defined as a licensed insurer that has received authorization from a state insurance department to operate within that state. This means the insurer meets all regulatory requirements and is subject to state oversight, which helps ensure financial stability, consumer protection, and adherence to the laws governing insurance in that jurisdiction.

Being an admitted insurer allows the company to offer policies that are backed by the state's guaranty fund, providing a safety net for policyholders in case the insurer becomes insolvent. This is a crucial aspect of consumer confidence and market stability, as admitted insurers contribute to regulatory frameworks designed to protect policyholders.

The other options do not accurately describe what an admitted insurer is. A company not licensed to conduct business is not an admitted insurer, as it lacks the necessary authorization. Similarly, an insurer that works solely with nonadmitted companies does not fit this definition, nor does one that operates exclusively online unless it is also licensed and admitted in a particular state. Thus, the correct understanding of an admitted insurer is centered around its licensing and state authorization to conduct insurance business.