What type of insurer is a surplus lines broker primarily engaged with?

A surplus lines broker is primarily engaged with non-admitted insurers. Non-admitted insurers are those that have not been licensed by the state insurance department to operate in that specific state. These insurers often provide coverage for risks that admitted insurers either cannot or will not insure, typically due to the unique or high-risk nature of those risks.

Surplus lines brokers have the ability to access a variety of specialized insurance products that are not available through admitted markets. This is crucial for individuals or businesses needing coverage for atypical risks, such as certain types of marine insurance, aviation insurance, or coverage for emerging industries. Since these non-admitted insurers do not fall under the same regulatory framework as admitted insurers, surplus lines brokers must adhere to specific regulations regarding surplused lines business, such as ensuring that the coverage is not available through admitted insurers and that the insured holds a valid surplus lines license.

Understanding the role of surplus lines brokers and their interaction with non-admitted insurers is essential for anyone studying this area of insurance, as they play a vital role in providing coverage solutions when traditional insurance markets cannot meet those needs.