Excess and surplus lines brokers must be what?

Excess and surplus lines brokers must be state licensed because they operate under specific regulatory frameworks that vary by state. Licensing ensures that these brokers meet the necessary qualifications and adhere to local laws and regulations concerning the placement of risks that traditional insurers may not cover. States typically require brokers to pass exams and maintain continuing education to ensure they are knowledgeable about insurance practices, consumer protection, and the unique aspects of excess and surplus lines.

While nationwide registration and federal certification might be applicable in broader contexts, such measures do not specifically pertain to the operational requirements for excess and surplus lines brokers within individual states. Membership in national insurance associations can be beneficial for networking and staying informed but is not a mandatory requirement for practicing as an excess and surplus lines broker. The core requirement remains state licensing, as this grants brokers the legal authority to operate in their respective jurisdictions.