When can insurance be sold through a surplus lines insurer?

• A. When the insurance cannot be obtained through an authorized carrier
• B. When the insured is under 18
• C. When the claim has been filed
• D. When the policy is new

Answer: (A)

Surplus lines insurance is used when coverage cannot be obtained from carriers authorized to operate in the state. The key point is that a risk can be placed with a surplus lines insurer only after it cannot be obtained through an authorized carrier. This ensures the standard market has been tried first for risks that fit ordinary underwriting. The other options don’t affect eligibility for surplus lines: age, whether a claim has been filed, or whether the policy is new do not determine when surplus lines can be used.