What is one of the primary goals of surplus lines insurance regulation?

One of the primary goals of surplus lines insurance regulation is to protect the financial integrity of the Commonwealth. This focus on financial integrity is crucial because surplus lines insurers often provide coverage in areas where traditional insurers may not, usually due to higher risks or unique circumstances. By regulating surplus lines, authorities ensure that these insurers maintain sufficient financial resources to meet their obligations, thereby safeguarding policyholders and the broader financial system.

Regulatory measures help ensure that surplus lines carriers are financially sound, which reduces the risk of insolvency and protects consumers from potential losses. This regulation fosters a stable market environment, which is essential for the overall health of the insurance industry, contributing to public trust and economic stability.

Other aspects of the regulation, such as promoting adequate competition and ensuring that a diverse range of risks can be insured, serve to support this primary goal of maintaining financial integrity, but the overarching aim remains the protection of the market and its participants.