Which of the following is a ground for withdrawal of surplus lines eligibility?

Prepare for the Surplus Lines Licensing Exam. Study with interactive quizzes and detailed explanations to boost your confidence and chances of success on the exam day!

Having a financial condition deemed unsound is a valid ground for withdrawal of surplus lines eligibility. Surplus lines insurance is designed to provide coverage in markets that are not adequately served by standard insurers, often due to specific risks that are deemed too high or unusual. Insurers must maintain a healthy financial condition to ensure they can honor claims and provide stable coverage.

If an insurer's financial condition is considered unsound—meaning they may be unable to meet their liabilities or obligations—regulators may choose to withdraw their eligibility to operate in the surplus lines market. This action protects policyholders by ensuring that only financially stable companies can underwrite such insurance, thereby minimizing the risk of insolvency and financial loss for policyholders.

The other options do not directly impact eligibility. For instance, expanding insurance services or maintaining high customer satisfaction does not inherently affect an insurer's financial health or ability to underwrite surplus lines. Similarly, processing multiple insurance claims could be a normal aspect of business operations and does not necessarily indicate financial instability. Therefore, option B is correct as it emphasizes the importance of an insurer's financial soundness in maintaining surplus lines eligibility.

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