The Suplus Lines insurers, or non-admitted carriers, are an important because they offer coverages that cannot be procured through the traditional admitted carrier market. Epitomized by Lloyd’s of London, this market can conduct business legally as long as that business is conducted within the parameters put forth by the state. Additionally, many states publish an approved list of approved Surplus Lines carriers for their state. In the case of Lloyd’s, it is an approved list of syndicates.
Although these parameters can vary from state to state, in general, three conditions must be met:
a) The policy must be obtained through a licensed Surplus Lines Carrier.
b) It must be determined through a diligent search that the needed insurance cannot be obtained through an admitted carrier.
c) Coverage cannot be obtained for the sole purpose of getting a lower premium or better contract than what was offered by an admitted carrier.
