What type of insurer is a company that is licensed to conduct insurance business in a given state?

The correct answer is the term used for a company that has received approval from the state to operate and sell insurance policies within that state's jurisdiction. An admitted insurer must comply with state regulations, including maintaining reserve requirements and following rate approval processes stipulated by the state insurance department. This regulatory oversight provides a degree of security for policyholders, as admitted insurers are often required to participate in state guaranty funds, which protect policyholders in case of the insurer's insolvency.

In contrast, surplus lines insurers operate in a slightly different framework; they provide coverage for risks that admitted insurers are unable or unwilling to underwrite. Non-admitted insurers, on the other hand, do not have a license to conduct business in the state and hence do not adhere to the same regulatory standards as admitted insurers. Lastly, a foreign insurer is one that is licensed in a different state than the one where the insurance is being sold, but it can still be an admitted insurer in that state as long as it meets the necessary criteria.

Therefore, the definition aligns perfectly with the characteristics of an admitted insurer, which is tasked with upholding specific regulations and protections for consumers in the insurance market.