P&CCaliforniaeasy
Under the California Insurance Code, what distinguishes an 'admitted' insurer from a 'non-admitted' insurer?
AAn admitted insurer is domiciled within California, while a non-admitted insurer is organized under the laws of another state or country
BAn admitted insurer is authorized to write only personal lines such as homeowners and auto, while a non-admitted insurer writes only commercial lines
An admitted insurer holds a Certificate of Authority issued by the Commissioner; a non-admitted insurer does not
DAn admitted insurer is a publicly traded stock company subject to SEC reporting, while a non-admitted insurer is a privately held entity
Why this is the answer
California Insurance Code § 24 defines an 'admitted' insurer as one entitled to transact insurance in California, having complied with all conditions precedent — chiefly obtaining a Certificate of Authority from the Insurance Commissioner under Ins. Code § 700. Section 25 defines 'non-admitted' as not entitled to transact business. Domicile (domestic, foreign, alien) is a separate axis governed by Ins. Code §§ 26-28. A non-admitted insurer may write California risks only through the surplus line process (Ins. Code §§ 1760 et seq.) via a licensed surplus line broker. See Ins. Code §§ 24, 25.
Studying for the California Property & Casualty exam?
This question comes from our P&C bank. Take a free practice test — no signup.