Which statement is true concerning surplus lines insurance?

Surplus lines insurance is designed to provide coverage for risks that are not typically insurable through standard insurance markets. This includes higher-risk applicants and sectors, such as those involved in unique or unusual activities, such as certain types of construction, entertainment, or specialized trades. As a result, brokers and agents seek surplus lines coverage when they can't find adequate insurance options in the conventional market due to the increased risk associated with these applicants.

The other statements do not accurately describe the characteristics of surplus lines insurance. For instance, the surplus lines market is not necessarily more regulated than standard insurance; in fact, it often operates with different regulations because it addresses niche markets. Additionally, while brokers must be licensed to negotiate surplus lines, there are specific licensing requirements that must be met. Lastly, surplus lines insurance is distinct from government insurance programs, as it comes from private insurers who are willing to take on risks that standard markets might reject. Therefore, the assertion that it is only available through government insurance programs is not accurate.