How is the fee for a surplus lines producer's license determined?

The fee for a surplus lines producer's license is determined by the department due to the regulatory framework established within the insurance industry. Each state has a department or authority that oversees licensing and sets the corresponding fees, which can vary based on administrative considerations, costs of regulation, and other factors. This approach allows the department to adjust fees as necessary to reflect changes in the regulatory environment or administrative costs.

Determining the fee through the department rather than through other means ensures that it remains aligned with the needs and functions of the state's insurance market regulation. Other methods, such as setting fees based on revenue or the number of insureds, can lead to inconsistencies and unequal financial burdens on producers, which the department seeks to avoid to maintain fairness and regulation efficiency.