Who typically handles compliance for surplus lines insurance?

The surplus lines broker is typically responsible for handling compliance related to surplus lines insurance. These brokers are specialized professionals who understand the regulatory framework governing surplus lines and are skilled in ensuring that the policies they place meet both state and federal regulations. Their role involves not only finding coverage for risks that standard markets will not insure but also ensuring that the necessary filings and premium taxes are properly reported to state authorities.

Considering the other options, policyholders generally lack the specific knowledge and resources to manage compliance on their own, as they are the recipients of the insurance rather than the facilitators. The state government plays a regulatory role and enforces compliance but does not directly handle it; rather, they oversee brokers and ensure that the surplus lines market operates within the law. Independent auditors may assess compliance after it has been established but do not actively manage or ensure compliance in the everyday operations of surplus lines insurance.