What distinguishes authorized insurers from unauthorized insurers?

Authorized insurers are those that have received a license from the state to operate within its jurisdiction and therefore must comply with the specific regulations set by that state. This involves meeting financial requirements, regulatory standards, and ensuring that they are able to pay claims. By meeting these requirements, authorized insurers demonstrate their stability and reliability to policyholders.

In contrast, unauthorized insurers operate without such a license and do not adhere to state regulations, which can expose policyholders to greater risks. They may not have the same level of oversight regarding their financial health or claims-paying ability, which could lead to issues if a policy needs to be fulfilled. Therefore, the main distinguishing factor is that authorized insurers have met state regulations for their operations, ensuring a level of consumer protection that unauthorized insurers cannot guarantee.