What does "admitted" mean regarding an insurance company?

In the context of insurance, "admitted" refers to an insurance company that has received authorization from a state's insurance department to operate within that state. This designation means that the company is licensed to conduct business and can offer policies to consumers while adhering to the state's regulatory requirements.

Being admitted implies that the company has met specific financial standards and regulatory frameworks set forth by the state, ensuring a level of protection for policyholders. These companies are often subject to state oversight regarding their rates, policy forms, and practices, which helps provide a level of stability and reliability to the insurance market in that state.

The other answer choices reflect misunderstandings of what it means for an insurance company to be admitted. A company being denied a license does not fit the definition of "admitted" since it indicates the opposite. Operating in multiple states without restrictions is not applicable to admitted companies; instead, such status can imply limited regulation. Lastly, offering only surplus lines insurance pertains to non-admitted carriers, which is a different category altogether where the insurer does not have full state approval.