Chapter 1 General Insurance

Limited Access to Information

A consumer reporting agency may not provide a credit report to any party that lacks a permissible purpose, such as the evaluation of an application for a loan, credit, service, or employment. Permissible purposes also include several business and legal uses.

Aleatory Contract

Based on the uncertainty of a loss, there will likely be an unequal exchange of consideration by either party

A(n)____________ is the person or entity that is covered by an insurance policy. A. Agency B. Producer C. Owner D. Insured

Insured

Estoppel

Judicial denial of a contractual right based on prior actions that are contrary to what the contract requires

The ___________ branch writes and passes state insurance laws, or statutes, to protect the insuring public. A. Executive B. Electoral C. Judicial D. Legislative

Legislative

A ________ insurance company is owned by its policyholders A. Stock B. Reciprocal C. Fraternal Benefits Society D. Mutual

Mutual

Contract of Adhesion

One party, the insurer, prepares the contract and it is not negotiable

Unilateral Contract

Only one party, the insurer, is legally bound to the contractual obligations

Peril

The cause or source of a loss, such as fire, windstorm, embezzlement, disease, death.

Fraud

The intentional misrepresentation, deceit, or concealment of material facts known by a person with the intention of causing injury to another

Risk may be defined as: A. A hazard B. The uncertainty of loss C. A peril D. Something that may increase the probability of a loss occurring

The uncertainty of loss

Concealment

The willful holding back or secretion of material facts pertinent to the issuance of insurance (or a claim). Concealment may result in denial of coverage and may void the policy.

The Insurance Contract

a legal contract purchased to indemnify the insured against a loss, damage, or liability arising from an unexpected event. The exchange of a relatively small and definite expense for the risk of loss that, if it occurs, may be large or small. Is designed to transfer risk from the insured to the insurer.

Implied authority

authority not specifically stated in the contract, but reasonable and necessary in order for the producer to carry out their specifically stated duties. For example, if a contract grants the express authority to transact insurance business, this implies the authority to give quotes and collect premiums. Not all specific powers will be spelled out in the contract

Casualty & Insurable interest

must exist "at the time of the loss", but need not be continuous. Insurance interest usually results from property or contract rights and potential legal liability.

Management Roles 1 Executives 2 Actuarial Department 3 Underwriting Department 4 Marketing/Sales Department 5 Claims Department

1 Oversee the operation of the business 2 Gather and interpret statistical information used in rate making. An actuary determines the probability of loss and sets premium rates. 3 Responsible for the selection of risks (persons or property) to insure and rating that determines policy premiums 4 Responsible for advertising and selling 5 Assists the policyholder, insured, or beneficiary in the event of a loss and processes, and pays the amount of the claim in a timely manner, based upon the contractual provisions and the amount insured

Four Elements of a Legal Contract

1. Competent Parties 2. Legal Purpose 3. Agreement 4. Consideration

Risk

A condition where the chance, likelihood, probability or potential for a loss exists.

Personal Contract

A contract between the insurance company and an individual. Personal contracts are specific to the person insured at the time the contract is formed. The owner and insured cannot be changed without the consent of the insurance company. A property and casualty insurance contract is personal since it cannot be assigned. Life insurance is NOT a personal contract. The policy can be assigned - or a new owner may be named as long as the insurer is notified of the change.

Valued contract

A contract that pays a specified amount regardless of the actual loss. A life insurance contract is an example of a valued contract. It has a face value that provides a death benefit in the event of a loss.

Misrepresentation

A false statement contained in the application

Misrepresentations

A false statement contained in the application; it usually does not void coverage or the policy, if it is immaterial. If the statement is material to the issuance of coverage, meaning the insurer would not have issued a policy had the misrepresentation not been made, or premiums charged would have been higher, or coverage limited, coverage does not apply. A material misrepresentation may void the policy.

Physical Hazard

A physical condition that increases the likelihood or probability of loss; may include the use, condition, or occupancy of property. Physical hazards may be seen, heard, felt, tasted, or smelled.

Direct Writing System

A producer or agent is an employee of the insurer, and the insurer owns the accounts. The agent may be paid a salary, salary and a bonus, or commission.

An insurer authorized to do business within this state is considered what type of insurer? A. Admitted B. Domestic C. Foreign D. Alien

Admitted

Inaccuracies

Agency must forward to applicant inaccurate information given out within previous 2 years.

Career Agency System

Agents are recruited, trained and supervised by either a managing employee or General Agent who is contracted with the insurance company

Legal Purpose

All parties to a contract must enter it for a legal purpose and in good faith; public policy cannot be violated by a legal contract.

Competent Parties

All parties to a contract, such as the insurer and policyowner, must have legal capacity to enter into a contract. Those without legal capacity include: Minors - The insurer may be held responsible for its obligations if an individual is not of legal age. Each state has the authority to designate the age of majority to enter into a contract. The mentally incompetent or incapacitated Persons under the influence of drugs or alcohol

Independent Agency

An agent or agency enters into selling agreements with more than 1 insurer; an unlimited number of insurers may be represented. The agency retains ownership of the business written. The independent contractors are paid a commission and must cover the cost of agency operations.

Morale Hazard

An attitude of indifference toward the risk of loss that increases the probability of a loss occurring.

Exclusive or Captive Agency System

An exclusive or captive agent represents only one company or a group of companies that have common ownership. The insurer retains ownership rights to the business written by the agent and may or may not provide the agent with office and agency support services. The agent is an employee or a commissioned independent contractor.

Adverse Selection

An imbalance created when risks that are hard to insure (more prone to losses than the average (standard) risk) are the only risks seeking insurance within a specific marketplace. For example, only those living in earthquake-prone areas seek to buy earthquake insurance or those in the poorest of health seeking to acquire life or health insurance. High risks exposures tend to seek or continue insurance at a higher participation rate than the average risk exposures do.

Insurable Events

Any event, past or present, which may cause loss or damage, or create legal liability on the part of an insured.

Utmost Good Faith

Both parties bargain in good faith when forming and entering into the contract. The two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive has been made.

Conditional Contract

Both parties must perform certain duties and follow rules of conduct to make the contract enforceable. The insurer must pay claims if the insured has complied with all the policy's terms and conditions. Without premiums being paid on time and in full the insurer is not obligated to pay the claim if the policy lapses.

Disclosure upon Request

Consumer reporting agencies must provide the information on file if requested.

The State's __________ branch enforces the existing statutes that have been put in place. A. Electoral B. Legislative C. Executive D. Judicial

Executive

Which type of producer authority is specifically stated in the producer's contract? A. Agency B. Implied C. Apparent D. Express

Express

A ____________ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. A. Retention B. Sharing C. Facultative D. Treaty

Facultative

What is the specific industry term for a legal and ethical relationship of trust regarding another party's money? A. Fiduciary duty B. Consumer rights C. Professionalism D. Law of agency

Fiduciary duty

Investigation of Disputed Information

If a consumer's file contains inaccurate information, the agency must promptly investigate the matter with the source that provided the information. If the investigation fails to resolve the dispute, a statement may be added to the credit file explaining the matter.

Which of the following is NOT one of the essential elements of any legal contract? A. Offer and Acceptance B. Competent Parties C. Indemnity D. Legal Purpose

Indemnity

Direct Mail or Direct Response Company

Insurers sell insurance policies directly to the public via licensed employees or contractors. They use a marketing system that utilizes mass media, such as direct mail, newspapers, magazines, radio, television, internet, web sites, call centers, and vending machines.

Fraud

Intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. Contains 5 elements: False statement, made intentionally and that pertaining to a material fact Disregard for the victim Victim believes the false statement Victim makes a decision and/or acts based on the belief in, or reliance upon, the false statement The victim's decision and/or action results in harm

Each of the following is a factor considered by an underwriter, except: A. Marital status B. Age C. Gender D. Hazardous occupation

Marital status

The difference between a misrepresentation and a material misrepresentation is: A. A material misrepresentation is always intentional B. Material misrepresentations are considered insurance fraud C. A material misrepresentation is grounds for criminal charges D. Material misrepresentations are issues that affect policy issuance

Material misrepresentations are issues that affect policy issuance

Warranties

Material statements in the application or stipulations in the policy that are guaranteed true in all aspects.

Insurance coverages that cannot be obtained from any authorized insurers in a state: A. May be purchased by the federal government only B. May be purchased only from a domestic insurer C. May be purchased from an unauthorized insurer as surplus lines D. Is obtained illegally and would be a violation of the states insurance code

May be purchased from an unauthorized insurer as surplus lines

An insurer NOT authorized to do business within this state is considered what type of insurer? A. Alien B. Domestic C. Non-Admitted D. Foreign

Non-Admitted

A company owned by stockholders that does NOT pay dividends to policyholders is considered: A. Nonparticipating B. Noncontributory C. Participating D. Contributory

Nonparticipating

Contract of Adhesion

One party writes the contract, without input from the other party. One party (insurer) prepares the contract and presents it to the other party (applicant) on a "take-it-or-leave-it" basis, without negotiation. Any doubt or ambiguity found in the document is construed in favor of the party that did not write it (insured).

Unilateral Contract

Only one party is legally bound to the contractual obligations after the premium is paid to the insurer. Only the insurer makes a promise of future performance, and only the insurer can be charged with breach of contract. The policyowner can cancel the policy at any time and for any reason. The policyowner is not required to continue paying future premiums.

Indemnity Contract

Pays a specified dollar amount, as stated in the contract, up to the amount of the actual loss. These contracts are considered reimbursement plans

Loss

Reduction, decrease, or disappearance of value. A loss is the basis of a claim under the terms of an insurance policy.

To make insurance more affordable and protect the insurance company from paying out too much in claims, insurers will: A. Reinsure the risk B. Reserve the risk C. Deny the risk D. Retain the risk

Reinsure the risk

Disallowed Information

Report must not include lawsuits over 7 years old or bankruptcies more than 10 years old.

Legal contract

Requires 4 elements that include competent parties, legal purpose, offer and acceptance, and consideration

Speculative Risk

Situations where there is a chance for loss, gain, or neither loss or gain to occur. Examples of speculative risk include gambling, investing, or starting a new business. Speculative risk cannot be insured.

Pure Risk

Situations where there is no chance for gain; the only outcome is for nothing to occur or for a loss to occur. Pure risk is the only risk that can be insured. Examples include the possibility of: Damage to property caused by a fire or other natural disaster Financial loss as a result of injury, illness, or death

What are the two types of risk? A. Calculable and accidental B. Speculative and pure C. Physical and moral D. Standard and substandard

Speculative and pure

The insurance industry is primarily regulated at the _________ level. A. Federal B. County C. State D. Insurers

State

Warranties

Statements in the application or stipulations in the policy that are guaranteed true in all respects. If warranties are later discovered untrue or breached (past, present or future), coverage (and sometimes the contract) is voided.

Representations

Statements made by the applicant on the application are considered representations and not warranties. The representations are statements that are believed to be true to the best of the knowledge and belief of the applicant/insured at the time of application.

Representations

Statements on the application that are substantially true, or believed to be true, to the best of the applicant's knowledge at the time of application

Material vs. Immaterial Representations

Statements that impact the acceptance of an insurable risk -whether involving the rating of an acceptable risk, or the decision as to whether to accept or decline a risk - are considered to be material. Immaterial representations do not affect the acceptance or rating of the risk.

Insurability

The ability of an applicant to meet an insurer's underwriting requirements.

Personal Producing General Agent

The agent sells insurance for carriers it is contracted with and maintains its own office and staff. These agents do not recruit career agents.

Loss Exposure

The condition of being at risk of loss. Simply by existing, property and people are subject to many different risks. To an insurance company, each insured person or their covered property represents the risk of loss and the value of each potential claim is a known loss exposure.

Tom submits an application and a premium check. Six days later, the insurer issues the policy as applied for and mails it overnight to Tom's producer. Tom picks up the policy at his producer's office the next day. When did Tom's coverage begin? A. The day the insurer mailed the policy B. The day the insurer issued the policy C. The day Tom submitted his application D. The day Tom picked up his policy at his producer's office

The day Tom submitted his application Since the policy was issued as applied for, the effective date of coverage is the date of application.

Aleatory Contract

The exchange of value is unequal. The insured's premium payment is less than the potential benefit to be received in the event of a loss. The insurer's payment in the event of a loss may be much greater, or much less ($0 in the event a loss doesn't occur), than the insured's premium payment.

Gramm-Leach-Bliley Act (the Financial Services Modernization Act of 1999) The privacy notice must explain:

The information collected about the consumer Where that information is shared How that information is used How that information is protected The notice must also identify the consumer's right to opt out of the information being shared with unaffiliated parties as part of the provisions of the Fair Credit Reporting Act.

Principle of Indemnity

The insured is to be restored to their original financial position that they enjoyed prior to their loss

Principle of Indemnity

The insured should be restored to the same financial or economic condition that existed prior to the loss, depending on the amount and type of insurance purchased. The insured should not profit from an insurance transaction, but be made "whole" again.

Underwriting

The process of selecting, classifying, and rating a risk for the purpose of issuing or not issuing insurance coverage.

Waiver

Voluntary surrender of a known right, claim or privilege; An example would be an insurer's failure to obtain an answer to an unanswered question in its application for insurance prior to issuing the policy. Such a failure waives the insurer's right to contest a claim based on the information it could reasonably have obtained. It may also be in cases in which the insurer accepts an overdue premium that keeps the policy in-force.

Express authority

athority specifically granted in the agent's contract. Limitations on the authority may also stated in the contract. For example, a contract may grant a producer the authority to bind certain types of risk, but may also state that binding authority is limited if certain conditions apply.

Law of Agency

defines the relationship between an insurance company, known as the principal, and a producer operating as its agent. The agent represents the principal and is appointed to transact insurance business on their behalf. This includes soliciting applications, collecting premiums, providing service to clients, and explaining the company's insurance policies to prospective buyers.

(Agent) Producer's Responsibilities to the Insurer:

fiduciary duty to the insurer in all respects. A fiduciary is a legal or ethical relationship of trust between two or more parties. Typically, a fiduciary prudently takes care of money for another person, for instance, especially when a producer handles premiums for insurance policies or applications. Producers must keep premiums in a trust account that is separate from other funds and forward the money to the insurer promptly; there must not be any commingling of funds. Producers must report any material facts that may affect underwriting and they are responsible for soliciting, negotiating, selling, and cancelling the insurance policies with the insurer. Producers have a duty to only recommend the purchase of policies that are suitable to their clients.

Non-Admitted (Unauthorized)

insurer has either applied for authorization to do business in this State and was declined or they have not applied. They do not have a Certificate of Authority to do business in the State

Admitted (Authorized)

insurer is authorized by this State's Commissioner of Insurance to do business in this State and has received a Certificate of Authority to do business in this State

Life & Health Policies & Insurable interest

must exist "at the time of application", but not necessarily at the time of loss. Coverage is determined based on the possibility of an economic or financial loss due to an accident, sickness, or the death of the insured. The amount of insurance that may be purchased varies based on the type of coverage. Each person has an unlimited insurable interest in their own life, but this does not prevent an insurance company from limiting the amount of life insurance it makes available to any person. The insurer does not want to overinsure, as this may increase the likelihood of a claim.

All Policies & Insurable interest

must exist in every enforceable insurance contract. Insurance interest requires the potential for an insured to suffer financial or economic hardship in the event of a loss, as well as a valid legal purpose for the contract

The Fair Credit Reporting Act

protects consumer privacy and protects the public from overly intrusive information collection practices. It ensures data collected is confidential, accurate, relevant and used for a proper and specific purpose. When an application is taken, it must inform the applicant a credit report (from a consumer reporting agency) can be obtained. The purpose of this is to determine the financial and moral status of an applicant (for variety of purposes such as employment screening, insurance underwriting or loan approvals). An applicant has the right to review the report.

Apparent authority

when the principal's conduct gives the general appearance that the authority exists. A producer's use of preprinted forms, letterhead, business cards, and rate books bearing the insurer's company logo all demonstrate apparent authority.

Property & Insurable interest

While it is unlikely an insurer will issue a policy if there is no insurable interest at the time of application, insurable interest must specifically exist "at the time of the loss." Property ownership, or a mortgage or lien, is evidence of insurable interest.

Correct or Delete Inaccurate Information

A consumer reporting agency must correct or, if necessary, delete from a credit file the information that is found to be inaccurate or can no longer be verified. The consumer reporting agency is not required to remove accurate data from a file unless it is outdated. Adverse information that is more than 7 years old (10 years for bankruptcies) must be removed from the file.

If a person engaged in the business of insurance, whose activities affect interstate commerce, willfully embezzles, misappropriates funds or property knowingly, and with the intent to deceive, makes a false material statement, or purposely overstates the security of an insurer, the following penalties will apply:

A fine of no more than $50,000, imprisonment for up to 10 years, or both If the violation jeopardized the safety and soundness of an insurer, and was a significant cause of the insurer being placed in conservation, rehabilitation, or liquidation by an appropriate court, imprisonment can be for up to 15 years If the amount embezzled or misappropriated does not exceed $5,000, violators will be fined up to $50,000, imprisoned for up to 1 year, or both

Authority and Powers of Agency

A producer functioning as an agent for an insurer has an agency contract stating the parameters of their authority to represent the insurer. Because an agent is a representative of the principal, the insurer is responsible for all the actions of its agent, as long as that agent is acting within the scope of the authority granted to them in their agency contract with the insurer. If an agent's action exceeds the authority of their contract, the agent may be personally liable for that action. Actions fall under one or more of the following types of authority: express, implied, and apparent.

Insurable interest

A relationship that must exist at the time of application in which a potential for financial hardship exists in the event of a loss

Hazard

A specific condition that increases the probability, likelihood, or severity of a loss from a peril.

Parol Evidence Rule

A written contract may not be altered without the written consent of both parties.

A company that is licensed to sell insurance in a particular state is: A. A nonadmitted company B. A domiciled company C. A foreign company D. An authorized company

An authorized company

Conditional Contract

Both parties must perform certain duties and follow rules of conduct to make the contract enforceable

Applicant Challenge

Credit reporting agency must reinvestigate within 6 months, if applicant challenges accuracy.

Which of the following is NOT an essential element of an insurable risk? A. The loss must be intentional B. The chance of loss must be calculable C. A large number of similar or same type units facing the same perils D. The loss must be measurable

The loss must be intentional

Moral Hazard

Dishonest tendencies that increase the probability of a loss; may include certain characteristics and behaviors of people. Moral hazards are most closely related to some form of lying, cheating, or stealing.

All of the following are producer responsibilities, EXCEPT: A. Represent the insurer B. Issue policies C. Solicit and accept applications, and forward them to the insurer D. Provide quotes and collect premiums

Issue policies

Insurable Risks Must Include:

Large number of homogeneous units or groups with the same perils (Law of Large Numbers - As the number of units in a group increases, the more likely it is to predict a particular outcome & Auto insurance losses are the easiest type of insurance loss to predict precisely because the number of units insured is so great) The chance of loss must be calculable. A statistical expectation of loss is used by insurers to calculate premiums The loss must be measurable (definite and verifiable in terms of amount, cause, place and time) The premiums must be affordable From the perspective of the insured, the loss must be accidental in nature Catastrophic perils are not covered; examples include war, nuclear hazard and illegal operations

Subrogation

Occurs when a claim is paid by the insurer who has the contract and the right to take legal action against a negligent third party who may have caused the loss. Life policies have no right of subrogation.

Which of the following would be considered a speculative risk? A. The possibility your car is totaled in an auto accident B. The possibility you will die on the job at a young age C. The possibility the painting you bought might be a long-lost masterpiece D. The possibility you will become disabled

The possibility the painting you bought might be a long-lost masterpiece

Agreement

One party must make and communicate an offer to the other party and the second party must accept that offer. Without an offer, there is nothing to accept, and without acceptance of an offer, there can be no agreement. Offer, acceptance, or agreement can represent this element. Offer - The offer made to enter into an insurance contract is most commonly done through an application, accompanied by an initial premium, submitted by the applicant. Acceptance - The acceptance of an offer to provide an insurance contract takes place when the insurance company agrees to issue the insurance applied for, after receiving an initial premium and complete application. If the applicant is insurable, but only under less favorable terms than were initially applied for, the insurer may make a counteroffer. In such cases, the insured has been determined to be acceptable to the insurance company, but a policy will not be in force until the applicant pays a higher premium and/or accepts any conditions imposed on the coverage (such as reduced benefits).

A life insurance policy is a unilateral contract, because: A. It insures only one life B. The exchange of values is unequal C.Only one party writes the contract D. Only one party can be charged with breach of contract

Only one party can be charged with breach of contract

USA PATRIOT Act and Anti-Money Laundering (AML) "red flags" agents are trained to recognize

Paying for an entire policy up front with cash Early cancellation of the policy, regardless of cancellation fees or surrender charges The heavy use of third parties for policy transactions Strong reliance on wire or electronic fund transfers to foreign accountsAgents/brokers are required to report any activity they believe, or even have reason to suspect, is an effort to launder money. Depending upon a producer's involvement in the transaction, failure to comply can result in dismissal and civil, or possibly even criminal, prosecution.

(Agent) Producer's Responsibilities to Insurance Applicant or Insured:

Producers must forward premiums to the insurer in a timely manner. They must seek and gain knowledge of the applicant's insurance needs in order to ensure they are recommending suitable products for them. Producers must review and evaluate the applicant's current insurance coverage, limits, and risks, and they must serve the best interests of the applicant or insured, even though they represent the insurer. Producers must recommend coverage that best protects the insured from possible loss and NOT just the products that would be most profitable from the perspective of the producer. Life and health producers do not issue contracts or binders for life or disability insurance and should not imply that coverage is in effect simply because a person submits an application and pays the first premium.

________ is generally an option only for large corporations who may want to limit their risk up to a certain dollar amount, then buy insurance above and beyond that amount. A. Reciprocal insurance B. Mutual insurance C. Risk retention D. Self-insurance

Self-insurance

Managing Risk (STARR)

Sharing- Investments of a large number of people may be pooled by use of a corporation or partnership Pooling or spreading the risk among a large number of persons or entities Transfer- Transferring the risk from one party to another, such as from a consumer to an insurance company Transfer the uncertainty of loss via a contract Avoidance- Elimination of the risk Avoid the activity that gives rise to the chance of loss After potential areas of hazards have been identified, it may be found that some exposure to risk can be eliminated, but it is impossible to avoid all risk A risk may be avoided by not accepting or entering into the event which has hazards. This method has severe limitations because such a choice is not always possible, or if possible, it may require giving up some important advantages. Reduction- Minimizing the chance of loss, but not preventing the risk. For example, sprinkler systems, burglar alarms, pollution controls and safety guards on machinery, or taking medications and having preventive medical care Retention- Assume the responsibility for loss Self-insure the entire loss or a portion of the loss. Choosing deductibles is a method of risk retention. It may be economically practical for an insured to not insure each exposure to loss and, instead insure only those risks that threaten financial stability or security

Consideration

Something of value is exchanged by each of the parties to the contract; the exchange of money (first premium only) for a promise (the guarantees within the contract). The consideration made by the applicant is the information on the application and the initial premium payment. If an application is not accompanied by the initial premium, no offer has been made in the technical sense, since the consideration given is incomplete. If the insurer still offers a policy based on the application (notice the policy is now an offer), then acceptance is given when the initial premium is paid. At that point, consideration is complete, and the policy is in force.The consideration provided by the insurer is its promise to pay for covered losses—the contract itself.

_____________ insurance allows for insurance coverage to be obtained when not available from admitted carriers. A. Foreign B. Surplus lines C. Fraternal D. Brokerage

Surplus lines

An insurance contract is an aleatory contract. This means: A. The contract is specific to the insured person B. One party writes the contract, the other party must accept it "as-is" or reject it C. Both parties participate in writing the contract together D. The values exchanged by the parties are of unequal value

The values exchanged by the parties are of unequal value

Mass Marketing

This type of marketing uses the direct response or direct mail method to target a specific type of insurance to a large group of individuals, such as the American Association of Retired People (AARP). The insurer may benefit through reductions in marketing costs and underwriting expenses may be lower when coverage is offered to a limited population. Associations may receive some financial benefit from allowing an insurer to market directly to its membership.

How would an insurance agent most likely use a financial rating service? A. To publish the agent's opinion of an insurer B. To determine how much premium to charge a client C. To obtain a better commission rate D. To evaluate the financial stability of an insurance company

To evaluate the financial stability of an insurance company

The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is known as a ____________ agreement. A. Reciprocal B. Treaty C. Facultative D. Residual

Treaty

Surplus Lines Insurance

finds coverage when insurance cannot be obtained from admitted insurers. However, it cannot be utilized solely to receive lower cost coverage than would be available from an admitted carrier. Each State regulates the procurement of Surplus Lines insurance in its State. Can be placed through non-admitted carriers. Non-admitted business must be transacted through a Surplus Lines Broker or Producer.