- Surplus Lines Insurance
- Insurance coverage placed with an unauthorized (non-admitted) insurer for risks that admitted, licensed carriers in the state are unwilling or unable to write. It fills gaps for hard-to-place, unusual, or high-risk exposures.
- Admitted (Authorized) Insurer
- An insurance company that holds a certificate of authority from the state and is licensed to transact insurance there, subject to full rate and form regulation. Its policies are backed by the state guaranty fund.
- Non-Admitted (Unauthorized) Insurer
- An insurer that is not licensed in the state but is permitted to write surplus lines business through a licensed surplus lines agent. Its rates and forms are generally not filed with or approved by the state.
- Diligent Effort / Diligent Search
- The requirement that a surplus lines agent document a good-faith attempt to place the coverage with admitted carriers—typically obtaining a set number of declinations—before placing it with a non-admitted insurer.
- Declination
- A formal refusal by an admitted insurer to provide the requested coverage. Declinations are collected as evidence that the risk could not be placed in the standard market.
- Eligible (Approved) Surplus Lines Insurer
- A non-admitted insurer that meets the state's financial and eligibility standards and appears on an approved list, making it acceptable for placing surplus lines coverage.
- Surplus Lines Premium Tax
- A tax imposed on the premium of surplus lines policies, which the surplus lines agent is responsible for collecting and remitting to the state, since the non-admitted insurer does not pay standard premium taxes.
- Guaranty Fund (Non-Coverage)
- A state fund that pays claims when an admitted insurer becomes insolvent. Surplus lines policies from non-admitted insurers are generally NOT protected by the guaranty fund, a key disclosure to insureds.
- Surplus Lines Agent License
- A specialized license, typically requiring the holder to already be a licensed property and casualty agent, that authorizes an individual to place business with non-admitted insurers.
- Export / Export List
- To "export" a risk means to place it in the surplus lines market; an export list identifies types of coverage pre-approved for the surplus lines market without needing individual declinations.
- Exam Fee and Format
- The Surplus Lines exam consists of 60 scoreable questions with a 60-minute time limit and a $29 exam fee.