Can surplus lines insurance be placed with non-admitted insurers in New Jersey?

Surplus lines insurance can indeed be placed with non-admitted insurers in New Jersey, but it is subject to specific eligibility criteria. This means that there are regulations in place to ensure that the risks are properly assessed and that the non-admitted insurer is financially capable of providing the necessary coverage.

Non-admitted insurers operate outside the standard state regulations that govern licensed carriers, and they are utilized primarily when coverage is not available through admitted insurers. For instance, if the risk is considered high or unique, which traditional insurers may not cover, then surplus lines may be the appropriate avenue.

In New Jersey, brokers must ensure that the placement aligns with the guidelines set forth by the state's Department of Banking and Insurance, which often includes documenting that the coverage could not be found with an admitted insurer. This adherence to eligibility criteria serves to protect consumers and maintain the integrity of the insurance market.

Therefore, the correct answer accurately reflects the procedures and regulations surrounding surplus lines insurance in the state, underscoring that while non-admitted insurers can indeed be used, it must be done in accordance with established criteria.