If an insurer holds a Certificate of Authority, it is referred to as what type of insurer?

An insurer that holds a Certificate of Authority is recognized as an Authorized or Admitted insurer. This designation signifies that the company has met all the regulatory requirements to operate in a specific jurisdiction, allowing it to legally offer insurance policies to consumers in that area. The Certificate of Authority is a crucial aspect of insurance regulation, as it ensures that the insurer complies with state laws and protects policyholders by adhering to certain financial and operational standards.

Authorized or Admitted insurers are also subject to state oversight, which includes financial examinations to ensure their solvency and ability to pay claims. This status provides reassurance to consumers, as these insurers are monitored by state regulators to ensure they conduct business in a fair and ethical manner.

In contrast, insurers that operate without this certification are generally classified as Unauthorized or Non-admitted, which means they do not have the necessary approval to sell insurance in that state and may not provide the same level of consumer protections. Other types of insurers, such as Captive or Excess, refer to specific structures or types of coverage but do not imply compliance with state regulatory requirements like an Authorized or Admitted insurer does.