There are many carriers that are admitted in California that are not domiciled in California. The state where a carrier is domiciled is where their offices are physically located. Probably most of the admitted carriers in California are domiciled elsewhere. A carrier is only domiciled in one state but can be admitted in many states. Thus a "California Admitted Carrier" can be domiciled in another state than California
California Admitted carriers participate in the California Insurance Guarantee Association or CIGA. Non-Admitted carriers do not participate in this fund. .
Non-Admitted carriers are also referred to as Surplus Lines carriers. They typically write risks that Admitted carriers will not write. This is why we see so many non-admitted carriers in the construction industry.
The California Department of Insurance maintains what we call the LASLI list which is the LIST OF APPROVED SURPLUS LINE SUPPLIERS. You can see this list here. This is an important list when dealing with Non-Admitted carriers and you should verify that the carrier is on this list if you are going with a non-admitted carrier.
The stability or size of an insurance carrier is not directly related to whether it is Admitted or Non-Admitted. There are many A++ XV carriers that are non-admitted that use industry standard forms just as there are Admitted carriers that are B rated and much smaller in the financial size category and some use manuscript forms (non industry standard or non ISO forms). It is often a matter of whether a particular carrier decides to operate in California (or any other state) as Admitted or Non-Admitted. Some carriers operate as Admitted in other states but Non-Admitted in California. We have seen carriers that switched from being Admitted to non-admitted such as companies that are sister companies with one being admitted and the other non-admitted that moved business from the Admitted to the Non-Admitted carrier when the insurance market was very hard.
Possibly one of the reasons carriers do this is that it gives them more leeway in changing rates than if they were admitted. It makes it more possible for them to remain competitive and raise rates (as we say in the hard market) or lower them (as we have seen lately) faster than if they were Admitted carriers. This is especially important for the types of risks that surplus lines carriers typically insure.
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