Question 64

A surplus lines broker is authorized to place business with eligible surplus lines insurers.

A surplus lines broker is specifically authorized to place business with eligible surplus lines insurers, which are non-admitted carriers that can provide coverage not available in the standard market.

A) Other agents only

This option is incorrect because a surplus lines broker does not limit their business to placing insurance only with other agents. Instead, their primary role is to connect clients with eligible insurers that are not part of the admitted market.

B) admitted insurers only

This choice is incorrect as surplus lines brokers operate outside the realm of admitted insurers. Admitted insurers are those that are licensed to do business in a particular state, whereas surplus lines brokers deal with insurers that are not licensed in the state but are authorized to provide coverage under specific conditions.

C) Government insurance programs

This option is also incorrect. While government insurance programs can provide certain types of coverage, surplus lines brokers focus on placing insurance with eligible surplus lines insurers, which are private entities. Government programs do not fall under the jurisdiction of surplus lines.

D) eligible surplus lines insurers

This is the correct option. Surplus lines brokers are expressly authorized to place business with eligible surplus lines insurers, which are typically specialized carriers that can offer policies for risks that standard insurers may not cover.

Conclusion

The correct answer is D, as it accurately describes the role of surplus lines brokers in dealing with eligible surplus lines insurers. All other options fail to reflect the specific nature of the business that surplus lines brokers are authorized to conduct, focusing instead on categories of insurers or programs that do not align with their function.