admitted reinsurance

Reinsurance provided by a company that is licensed and authorized (admitted) to do business by a relevant governing entity (state or federal). Admitted reinsurance is used to provide higher coverage levels to customers when the risk is unacceptable to one insurance company alone. Reinsurance companies may pool the risk and share premiums. Or, an insurance carrier may pay a large scale reinsurer to take on partial liability for all the policies the carrier issues.