The Difference Between Admitted & Non-Admitted Insurance Companies
Admitted and non admitted insurance companies are different in a number of key and interesting ways. Learn about the difference between admitted and non admitted insurance companies with help from an assistant professor of insurance at The American College in this free video clip.
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Hello. I'm Kevin Lynch, Assistant Professor of Insurance at The American College in Bryn Mawr, Pennsylvania. Right now we're going to talk about the difference between an admitted and a non-admitted insurance company. Since 1945 and the passage of the McCarran–Ferguson Act, insurance in the United States has been regulated at the state level. What this means is if a company wants to do business in a certain state it must be licensed by that state. The process that they go through to get licensed in a state is called The Admittance Process. So an admitted insurance company has gone through the process and has been approved. A non-admitted company has not. Does any of this matter to the agent? Well yes it does. It's very important as a matter of fact because agents may only represent and sell products for admitted carriers within their state. What about consumers? Does it matter to consumers? Well consumers are protected by the state insurance regulations. And it's not their responsibility to know whether a carrier is admitted or not admitted. It is the agents responsibility and if they represent a non-admitted carrier it could result in a fine or even loss of their license. But if you, as a consumer, want to be proactive visit your state insurance commissioners website. The admitted carriers will be listed there for your review. If you as a consumer that you've purchased a policy from a non-admitted carrier don't be concerned. Simply contact your state insurance commissioners office and they will help you either enforce the contract or have the contract voided whichever you choose. To handle your specific situation you would need to contact your state insurance commissioners office. This is Professor Kevin Lynch at The American College in Bryn Mawr, Pennsylvania. We've talked about the differences between an admitted and a non-admitted carrier. Thank you.