What is a surplus insurance agent?

A Surplus Line Broker is a person who places insurance with non-admitted insurers, covering risks other than aircraft and certain marine and transportation risks.

What are surplus agents used for?

Surplus lines insurance protects against a financial risk that is too high for a regular insurance company to take on. Surplus line insurance can be used by companies or purchased individually. Unlike normal insurance, this insurance can be bought from an insurer not licensed in the insured’s state.

Why would someone place their insurance with a surplus lines broker?

Surplus lines brokers specialize in finding coverage for risks that standard insurers won’t insure. Surplus lines brokers serve as intermediaries between regular agents and brokers and non-admitted insurers. A surplus lines broker must adhere to state surplus lines regulations.

What is an example of surplus lines insurance?

Surplus lines companies have the ability to react quicker to the demands of the marketplace, oftentimes resulting in a proving ground for new insurance products and underwriting concepts. Employment Practices Liability and Professional Liability (Errors and Omissions) Insurance are examples of such concepts.

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How is a surplus lines or wholesale insurance broker different from a typical insurance agent or broker?

Wholesale insurance agents place business brought to them by retail agents. … The latter work with retail agents and insurers to obtain coverage for the insured. Unlike a managing general agent, a surplus lines broker does not have binding authority from the insurer.

What is the difference between excess and surplus?

is that excess is the state of surpassing or going beyond limits; the being of a measure beyond sufficiency, necessity, or duty; that which exceeds what is usual or proper; immoderateness; superfluity; superabundance; extravagance; as, an excess of provisions or of light while surplus is that which remains when use or …

Is Lloyd’s of London an admitted carrier?

Lloyd’s is considered a “non-admitted” carrier in 48 states. The other two, Illinois and Kentucky, have accepted Lloyd’s as an admitted carrier for many years. In these states, the processing of business is the same as any other traditional carrier.

How does excess and surplus insurance work?

Simply put, Excess & Surplus lines (E&S) is a specialty market that insures things standard carriers won’t cover. … These specialists, otherwise known as general agents or wholesalers, are the link between the customer, the local insurance professional and the E&S carrier.

How are surplus lines insurers regulated?

While solvency regulation is the responsibility of the surplus lines insurer’s domiciliary state or country, the surplus lines transaction is regulated through a licensed surplus lines broker. … Surplus lines brokers and producers must be licensed to sell surplus lines insurance.

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How much is surplus lines tax?

Surplus lines tax/Stamping Fee: 3.0% payable by broker to the CDI; stamping fee of 0.25% (effective Jan. 1, 2020), payable by broker to The Surplus Line Association of California (SLA).

What are surplus lines companies?

Often called the “safety valve” of the insurance industry, surplus lines insurers fill the need for coverage in the marketplace by insuring those risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.

What is the difference between admitted and non-admitted insurance?

An admitted insurance company has been approved by a state’s insurance department, whereas a non-admitted insurance company is not backed by the state.

What is a domestic surplus lines insurer?

A Domestic Surplus Line Insurer is an insurer that is specially licensed under the Domestic Surplus Line Insurer Law (Section 445a) of the Illinois Insurance Code. … Prior to the inception of this law, a U.S. based surplus line insurer had to operate on a licensed, admitted basis in its state of domicile.

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