By contrast, many states will allow non-admitted carriers to transact business in their state where there is a special need that cannot or will not be met by admitted carriers. Non-admitted carriers are usually referred to as "surplus" or "excess lines insurers". Non-admitted carriers are not regulated in that state and do not contribute to the State Guaranty Fund, which protects policyholders from the bankruptcy of its insurance carrier.
Insurance purchased from these carriers is therefore riskier than doing business with admitted carriers and brokers must inform consumers if their insurance has been placed with a non-admitted insurer. Also, the purchaser and/or the insurance broker must provide a statement that it made a good faith effort to obtain the insurance from admitted carriers before seeking out a non-admitted carrier.