Under what circumstances can surplus lines insurance be placed?

Surplus lines insurance can be placed under specific circumstances when traditional market options are not available, particularly with nonadmitted insurers. This typically occurs when insurance products that are needed cannot be obtained from licensed, admitted carriers due to various reasons, such as the specialized nature of the risk or the risk being too high for admitted insurers to underwrite.

The surplus lines market allows brokers and agents to provide coverage for these unique risks by placing insurance with nonadmitted insurers that offer more flexible policy terms and conditions. These nonadmitted insurers are not subject to the same regulatory requirements as admitted insurers, which enables them to underwrite higher-risk applications that the admitted market does not cover.

Thus, when certain conditions regarding the need for the coverage and the eligibility of the nonadmitted insurers are met, placing surplus lines insurance becomes a viable option.