In many jurisdictions, state laws require a surplus lines broker bond from each producer (resident and non-resident) that engages in surplus lines marketing, underwriting and/or placement of risks in the non-admitted market sector. Surplus lines brokers serve an important role within the insurance industry, facilitating the ability of non-admitted specialized insurers to cover risks with policies that are not available within the standard admitted markets. Surplus lines insurance is generally transacted through such brokers who hold a special license for the same.
A surplus lines broker bond is a license/permit compliance obligation however most surety bonds of this class also contain financial guarantee provisions. To understand the nature of the obligation, one must understand what a surplus lines broker is responsible for. A producer's duty runs to three parties; the consumer, the carrier and the tax authority of the state wherein a risk is underwritten. Surplus lines broker surety bonds generally guarantee the following:
Essentially the surplus lines broker bond guarantees that the producer will be a responsible fiduciary, and will obey the rules that regulate her professional conduct. Need to know if your state requires a bond and in what amount? Visit the NIPR here for a state-by-state index. You may also visit our state-specific pages for more information.
National surety bond leader, SuretyOne.com is a specialist in the bonding needs of the insurance sector. We offer both surety and fidelity bonds needed by producers, independent brokers, surplus lines brokers and claims professionals in all fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about this surety bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat. A surplus lines broker bond is quick, easy and issued within an hour.
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