Why surplus lines

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. Each state has surplus lines regulations and each surplus lines company is overseen for solvency by its home state. A number of states maintain lists of eligible surplus lines companies and some keep a list of those that are not eligible to do business in that state.

In addition, depending on the state, the surplus lines agent or broker, who must be licensed, is responsible for checking the eligibility of the company.

Rank Group Direct premiums written Percent of total U. Group 3,, 5. Berkley Insurance Group 2,, 3. Group 1,, 1. 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.

While the admitted market is where most consumers find coverage, the surplus lines market is vital as a supplement for those consumers and businesses that cannot find coverage otherwise. Surplus lines insurance includes not only exotic risks, but day-to-day risks that fall outside of the underwriting guidelines of the standard market, making access to it imperative for customers who are unable to secure insurance coverage from an admitted insurer.

If you can dream it, surplus lines insurance can cover it!