Glossary
Surplus Lines
Coverage placed with an insurer not licensed in the insured's state, permitted when admitted carriers decline the risk.
Surplus lines exists for risks the standard market will not take. The insurer is non-admitted, meaning it is not licensed in the state and its policyholders generally have no access to the state guaranty fund if it fails.
Placement carries procedural obligations: a documented diligent search showing admitted carriers declined, surplus lines tax, and stamping fees. Those taxes and fees flow through agency accounting and must be kept distinct from premium and commission.
See also
- Wholesale Broker — An intermediary that places business with carriers on behalf of retail agencies, typically for risks the retail agency's…
- Managing General Agent — An intermediary granted underwriting authority by a carrier, able to bind coverage and often to handle claims on the car…
- Policy Fee — A flat charge added to a policy by the carrier or general agent to cover issuance costs, usually fully earned and non-re…