Admitted and non-admitted insurer

Since July 2011 and the Nonadmitted and Reinsurance Reform Act, a US risk written outside the admitted market answers to a single state, the insured's home state, which collects the surplus lines tax and applies its own rules. Before that, a multistate program could owe premium tax to a dozen regulators. The statute cleaned up the plumbing without moving the dividing line. An admitted carrier is licensed in the state: it files rates and forms there, often for prior approval, sits under local solvency oversight, and its policyholders fall back on the state guaranty fund if it goes under. A non-admitted, or E&S, carrier files nothing. It writes whatever wording it wants at whatever price it wants, and its insureds generally have no guaranty fund behind them, New Jersey being the exception with a dedicated surplus lines fund. Entry is still gated. A licensed surplus lines broker has to run a diligent search of the admitted market before going outside it, and remit the tax, although the 2011 act waived the search for large exempt commercial purchasers. In practice E&S takes what admitted carriers cannot price yet or no longer want: early cyber, heavy products liability, coastal property in Florida and California.