What is the primary function of a surplus lines licensee?

The primary function of a surplus lines licensee is to place insurance with non-admitted insurers. Non-admitted insurers are those that do not hold a license to operate in a particular state, but they can provide coverage that might not be available through admitted carriers. This is especially important in situations where the standard insurance market cannot accommodate certain risks due to their unique nature or high level of danger. Surplus lines licensees have been specifically authorized to facilitate access to this type of coverage for policyholders who require it.

In this role, surplus lines licensees must comply with specific regulations and conditions set forth by state insurance departments, including ensuring that the policyholders are informed about the status of the insurer. This licensing allows them to offer innovative and tailored solutions that address niche markets or special situations where traditional insurers may abstain from providing coverage.