What must be sent to the insured or producing broker after placing coverage with a nonadmitted insurer?

When coverage is placed with a nonadmitted insurer, it is essential to send a written notice of the coverage placement to the insured or producing broker. This requirement is in place to ensure transparency and inform the insured about the nature of their insurance coverage, including that it is provided by a nonadmitted (or surplus lines) insurer. This notice serves to alert the insured that the insurer is not licensed in the state and that certain protections, typically available when dealing with admitted insurers (like state guaranty funds), may not apply.

This communication is vital for compliance with regulatory requirements and helps maintain trust in the insurance transaction. By providing a notice of the coverage placement, it ensures that all parties involved are aware of the specifics of the arrangement and helps keep proper records of the transaction. This step is aligned with best practices in the insurance industry to protect consumer rights and uphold regulatory standards.