Surplus lines what is

These brokers are responsible for ensuring the surplus lines insurer meets eligibility criteria to write policies in the state and to ensure the insurers are financially sound. Surplus lines brokers and producers must be licensed to sell surplus lines insurance. Moreover, state insurance departments may suspend, revoke, or non-renew the license of a surplus lines broker or producer for various reasons, such as:. Whereas states monitor the eligibility of U.

Alien insurers are also held to ethics and integrity standards. They are prohibited from establishing a U. This guaranty is funded by admitted insurers and will pay claims should an insurer become insolvent.

Due to the strong and effective state-based solvency monitoring framework, the insolvency rate of surplus lines insurers has been historically equivalent to the admitted marketplace. Status: Issues regarding the activity and financial condition of U. Surplus Lines Insurance Information Institute. For the many thousands of businesses that rely on some level of surplus line protection to keep their doors open, surplus lines is an important segment of the market.

This type of structure differs from a traditional insurance company. Surplus lines Surplus lines by state The surplus lines market, a group of highly specialized insurers exists to provide coverage that is not available through licensed insurers in the standard insurance market.

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