Which type of insurers are licensed by the state to write insurance policies?

Standard insurers are the entities that are licensed by the state to write insurance policies. These insurers operate within the regulatory framework established by state insurance departments, which ensures that they meet specific financial and operational standards before they can sell policies to consumers. This licensure guarantees that the insurer is deemed trustworthy and capable of fulfilling insurance obligations.

Standard insurers typically offer policies that are approved by the state and are required to comply with certain consumer protection laws and insurance regulations. This licensing process also promotes stability and reliability within the insurance market, as it allows consumers to have confidence in the products offered by these companies.

In contrast, non-admitted insurers are not licensed in a particular state, meaning they can provide coverage but without the same level of regulatory oversight that standard insurers face. Surplus lines brokers act as intermediaries that deal with non-admitted insurers to provide coverage that standard insurers may not offer, and the guaranty fund refers to a system designed to protect policyholders in the event that a licensed insurer becomes insolvent, but it does not involve the issuance of insurance policies itself.