What documentation is required when placing surplus lines insurance?

When placing surplus lines insurance, it is essential to have a written statement indicating that a diligent search for admitted coverage was conducted. This documentation serves as evidence that the broker has complied with the regulatory requirements before seeking coverage from non-admitted insurers. The insurance market has stringent rules to ensure that licensed brokers are not bypassing the protections that come with the admitted market. By documenting the search for available admitted policies, brokers demonstrate due diligence and adherence to the law, which is crucial in the surplus lines context.

This requirement is designed to protect consumers by ensuring that surplus lines are only used when no suitable policies can be found in the admitted market, which typically offers more robust regulatory protections. Therefore, having this written statement is not only a best practice but also a regulatory obligation in many jurisdictions.