87. Which of the following is NOT a condition that must be met before surplus lines insurance may be obtained from an unauthorized insurer?
Answer: A
The insurer must have a current certificate of authority or license issued by the insurance department is NOT a condition for obtaining surplus lines insurance.
Surplus lines insurance can be acquired from unauthorized insurers, meaning they do not require a current certificate of authority or license from the insurance department, which makes this option incorrect as a condition.
A) The insurer must have a current certificate of authority or license issued by the insurance department
This statement is incorrect as a condition for obtaining surplus lines insurance. Surplus lines insurance can be procured from unauthorized insurers, which do not need to hold a certificate of authority or license from the insurance department, thereby making this option the one that does not represent a valid condition.
B) The business must be obtained through a licensed surplus lines broker
This option is a valid condition for obtaining surplus lines insurance. Insurance must be placed through a licensed surplus lines broker, ensuring that the transaction complies with regulatory standards.
C) Coverage may not be obtained solely for the purpose of obtaining a better contract or a lower premium than an authorized insurer could provide
This is indeed a valid condition as well. Surplus lines insurance cannot be sought merely for the sake of securing better terms or lower premiums compared to those offered by authorized insurers, which aligns with the principles governing such insurance.
D) The full amount of insurance cannot be obtained from authorized insurers who market the insurance in the state
This condition is also valid. Surplus lines insurance is only accessible when the full coverage cannot be obtained from authorized insurers, ensuring that surplus lines are used appropriately when no other options are available.
Conclusion
The correct answer is A, as it incorrectly states a requirement that does not apply to surplus lines insurance, which can be obtained from unauthorized insurers without a current certificate of authority. Options B, C, and D accurately describe conditions that must be met, reinforcing their validity in the context of surplus lines insurance regulations.