Which term describes an insurer that has not been granted a license to operate in a state?

The term that describes an insurer that has not been granted a license to operate in a state is "Nonadmitted." Nonadmitted insurers do not have formal approval from a state's insurance department to conduct business in that state. Consequently, they are often utilized for specialized or high-risk coverage needs that admitted insurers may not provide.

In contrast, admitted insurers are those that have received the necessary licensing and regulatory approval to operate within a state, meaning they are subject to state regulations and consumer protections. Surplus lines refer to coverage provided by nonadmitted insurers, often used for risks that cannot be fully covered by standard insurance markets. Authorized is another term often used synonymously with admitted, indicating formal permission to conduct insurance business within a specific jurisdiction.

In summary, "Nonadmitted" accurately identifies insurers operating without state licensing, distinguishing them from their admitted counterparts in the insurance market.