When an insurance company receives authorization from a state’s insurance commission or department to operate within the state, it is called an admitted insurer, or admitted company. Although the procedure to gain admittance varies from state to state, the insurance department is looking at financial information presented by the insurance company to determine the company’s financial stability. Companies that demonstrate financial stability receive admitted status. Admitted reinsurers are required to follow the same procedure. In contrast, a non-admitted insurer or reinsurer is one that is not licensed to do business in which the coveredexposure is located. Non-admitted insurers are not regulated by the state department of insurance and are not members of the state’s guaranty fund.An approved non-admitted insurance or reinsurance company is not licensed in the state in which it does business but has been approved by the state’s department of insurance to conduct business in the state because it is has posted a surety bond or trust fund. State departments of insurance have limited jurisdiction over approved non-admitted companies and such companies are not members of the state’s guaranty fund.