What designation is given to an insurance company that has not been approved by the state?

An insurance company that has not been approved by the state is referred to as unauthorized. This designation indicates that the insurer has not gone through the necessary regulatory approval processes required to operate legally in that specific state. Such approval typically involves ensuring that the company meets certain financial, operational, and regulatory standards set by state insurance departments.

If a company is unauthorized, it cannot offer insurance policies to consumers within the state, which helps protect consumers from unregulated and potentially financially unstable insurers. This regulatory oversight is crucial for maintaining the integrity and stability of the insurance market, ensuring that companies can fulfill their obligations to policyholders.

The other designations, such as authorized or admitted, refer to companies that have received the appropriate state approval and are allowed to conduct business, while surplus typically relates to the type of insurance that is not readily available in the admitted market, often provided by unauthorized insurers under specific conditions.