What should brokers do to prepare for a surplus lines audit?

To effectively prepare for a surplus lines audit, brokers should focus on organizing documentation of transactions and compliance practices. This involves compiling all relevant records, such as policy records, premium receipts, correspondence, and any documentation that demonstrates adherence to surplus lines regulations. Proper organization ensures that brokers can quickly reference information, respond to auditor inquiries, and demonstrate compliance with statutory requirements.

Having well-organized documentation not only facilitates a smoother audit process but also highlights the broker's professionalism and attention to regulatory standards. This preparation can prevent issues from arising during the audit and can help in building a strong compliance record, which is crucial for maintaining the license and reputation of the broker within the surplus lines market.

Preparation through organization reflects an understanding of the importance of compliance and fosters trust with both clients and regulators, ensuring the broker operates responsibly in the surplus lines insurance industry.