What does the term export refer to in surplus lines insurance?

The term "export" in the context of surplus lines insurance specifically refers to the practice of placing surplus lines insurance with nonadmitted or eligible surplus lines insurers. This is an important aspect of surplus lines because it distinguishes these insurers from standard admitted insurers, which are those licensed to operate within a specific state and backed by state insurance guarantees.

In the surplus lines market, when an insurance policy is exported, it means that the coverage is being arranged with an insurer that does not have a license in the insured’s state. This is often necessary for risks that are considered too unique or are difficult to place with standard market insurers. Surplus lines insurers usually cover higher risks, specialized lines, or non-standard policies that standard insurers are unable or unwilling to underwrite.

The other choices mainly do not accurately reflect the concept of exportation in this context; bringing surplus lines to domestic markets and selling directly to consumers does not capture the essence of placement with nonadmitted insurers, while issuing standard policies in foreign markets is not relating to the surplus lines specifically. Therefore, understanding "export" in this way provides clarity on the operational dynamics of surplus lines insurance and the role of nonadmitted insurers in the marketplace.