Which statement is true regarding Non-Admitted Insurers?

The statement regarding Non-Admitted Insurers that is true is that there is no assurance claims will be paid if they become insolvent. Non-Admitted Insurers operate outside of state insurance regulation and do not have the same guarantees as admitted insurers. As a result, policyholders do not have the same level of protection in the event of insolvency.

Admitted insurers must maintain reserves and comply with state regulations, which serve to protect policyholders. This includes participating in state guaranty funds that would pay claims if an admitted insurer becomes insolvent. Since non-admitted insurers do not have this regulation or backing, there is greater risk involved for the policyholders. Thus, while these insurers may offer coverage that isn’t available through admitted companies, those seeking coverage from non-admitted insurers should be fully aware of the risks, particularly concerning the possibility of claims not being paid if the insurer faces financial difficulties.