What action is required if an insured procures surplus lines insurance?

The requirement to file a report with the director when an insured procures surplus lines insurance is rooted in the regulatory framework that governs surplus lines transactions. Surplus lines insurance is typically used when coverage is not available from the admitted market, and it provides essential protection for risks that cannot be placed with standard insurers.

The regulation aims to ensure transparency and monitoring of surplus lines transactions by the state's insurance department. This oversight helps the director maintain records on the types of insurance being sold, the financial stability of surplus lines insurers, and to assure that the surplus lines market operates within legal parameters.

Filing a report includes providing details about the insurer, the type of coverage, and the insured. This information supports regulatory compliance and helps protect policyholders by keeping the state's insurance regulatory authority informed about the surplus lines market activity.

It is important to understand that the other actions, such as notifying the insurer or renewing primary insurance, do not specifically address the regulatory requirements established for surplus lines. These activities may be part of general insurance practices but do not fulfill the specific obligation to report to the director following the procurement of surplus lines insurance.