Legal Definitions - nonadmitted asset

A nonadmitted asset is an item that is owned and has value but cannot be included in evaluating the financial condition of an insurance company by law. In contrast, an admitted asset is an asset that can be included in evaluating the financial condition of an insurance company.

Examples of nonadmitted assets include:

• Investments in certain types of securities that are not approved by state insurance regulators
• Assets that are not easily valued or are difficult to sell
• Assets that are not owned by the insurance company but are held in trust for the benefit of policyholders

These examples illustrate that nonadmitted assets are assets that are not considered reliable or liquid enough to be included in an insurance company's financial evaluation.