What is a surplus lines licensee?

A surplus lines licensee is specifically defined as a professional who represents or assists a nonadmitted insurer in the process of placing insurance coverage. Nonadmitted insurers are those that are not licensed or authorized by the state insurance department to conduct insurance business in that particular state.

These licensees play a crucial role in the insurance marketplace, particularly when admitted insurers cannot provide coverage for certain risks due to their uniqueness or high risk. Surplus lines coverage is often sought after for businesses or individuals that do not fit the standard risk profiles typically accepted by traditional insurers.

The successful operation of surplus lines markets allows for greater flexibility and innovation in insurance products, catering to diverse needs and helping ensure that even high-risk entities can access the coverage they require. Understanding that a surplus lines licensee works specifically with nonadmitted insurers underscores the importance of these professionals in facilitating insurance solutions that might otherwise be unavailable through standard channels.