What does 'independently procured insurance' mean?

The term 'independently procured insurance' refers specifically to insurance that is obtained directly from a nonadmitted insurer. This entails a scenario where an individual or business seeks out a nonadmitted insurance provider on their own, rather than going through a licensed broker or intermediary. Nonadmitted insurers are those that are not licensed by the state where the insurance is being purchased, which means they are not regulated in the same manner as admitted insurers.

This type of procurement usually occurs when the coverage required is not available from admitted insurers, or when the cost or terms presented by nonadmitted insurers are more favorable. Therefore, the correct understanding of 'independently procured insurance' highlights the direct relationship with nonadmitted providers without intermediaries.

The other options do not align with this definition, as they involve either brokers, direct insurers that are typically admitted, or group policies, which do not fit the independent procurement model defined by the context of surplus lines insurance.