Which statement describes a non-admitted insurer?

A non-admitted insurer is defined primarily by its lack of a license to operate in the insured's home state. This means that the insurer has not gone through the necessary regulatory processes to gain approval from state insurance departments, which typically oversee and ensure the financial stability and ethical practices of insurers. As a result, policyholders purchasing from non-admitted insurers may have less regulatory protection compared to those dealing with licensed, or "admitted," insurers.

Non-admitted insurers can fill gaps in the insurance market, offering coverage for unique or high-risk situations that traditional, admitted carriers might not provide. However, this also means the buyer needs to be aware of the risks involved, as non-admitted insurers may not be covered by state guaranty funds in the event of the insurer's insolvency.

The other options convey misunderstandings about the nature of non-admitted insurers. For instance, while non-admitted insurers can offer niche products, they do not have the freedom to sell any type of insurance without restrictions because they are still bound by state-specific regulations on the types of insurance they can provide in a given jurisdiction. The assertion that they only operate in the home state of the insured is misleading, as non-admitted insurers can operate across multiple states, provided