If a risk cannot be placed with an admitted insurer, what can the DOI grant permission for?

When a risk cannot be placed with an admitted insurer, the Department of Insurance (DOI) has the authority to grant permission to place that risk with a nonadmitted insurer. Nonadmitted insurers, also known as surplus lines insurers, are those that are not licensed to operate in a particular state but are allowed to provide coverage when the required coverage cannot be obtained from admitted insurers. This is particularly important for risks that are unusual or high-risk, where the admitted market lacks the capacity or willingness to provide coverage.

By allowing the placement of such risks with nonadmitted insurers, the DOI ensures that policyholders have access to insurance options even when traditional markets are inadequate, thus providing a necessary safety net for unique or challenging risks. Nonadmitted insurers also typically face less regulatory scrutiny than admitted insurers, allowing them to offer more flexible underwriting and innovative coverage solutions that traditional insurers may not provide.