In the context of surplus lines insurance, which entities are considered states?

The correct choice indicates that the term "states" encompasses not only the 50 states of the United States but also includes U.S. territories such as Puerto Rico and Guam when discussing surplus lines insurance. This broader definition is essential because surplus lines insurance often operates across a wider jurisdictional spectrum than just the states within the continental U.S.

Surplus lines insurance is a type of coverage that is not available from admitted insurers in a particular state, allowing insurance brokers to seek coverage from non-admitted insurers. The consideration of territories is significant because these regions may also have unique insurance needs and regulatory frameworks that necessitate the use of surplus lines.

Understanding that territories are included in this context is crucial for anyone involved in surplus lines licensing. This knowledge ensures that professionals can effectively navigate the regulatory landscape and address the insurance needs of all regions under U.S. jurisdiction.