When must surplus lines brokers submit an affidavit?

Surplus lines brokers are required to submit an affidavit when they cannot find coverage through any admitted insurer. This requirement is in place to ensure that brokers are diligently seeking options from licensed insurers before turning to surplus lines. The affidavit serves as a declaration that the broker has made sufficient attempts to secure coverage from the standard market and confirms the necessity to seek alternative options.

This process helps maintain a level of accountability and transparency in the placement of insurance through surplus lines. It acknowledges the regulatory framework that protects consumers by ensuring that brokers are not simply opting for surplus lines without first exhausting more traditional methods of securing coverage.

The other options do not align with the specific regulatory requirements surrounding surplus lines brokers. For instance, filing an affidavit when a claim is made or after every policy placement does not reflect the intent and purpose of the affidavit, which is focused on the availability of coverage in the market. Additionally, submitting an affidavit at the start of every month does not correspond with any specific regulatory obligation related to surplus lines.