What is required before utilizing the surplus line market for an admitted carrier?

Before utilizing the surplus line market for an admitted carrier, a diligent search must be conducted. This requirement ensures that the insurance producer has made an effort to find coverage with a licensed insurer that is authorized to operate in the state. The diligent search typically involves attempting to place the risk with at least three admitted carriers that would provide coverage for the specific insurance needs.

The reasoning behind this requirement is to protect consumers by ensuring that all available options with admitted insurers are explored before resorting to the surplus lines market. Surplus lines are often used for risks that do not fit the criteria of standard insurance policies, and the diligent search serves as a safeguard for consumers by minimizing the use of surplus lines to only those instances where it is truly necessary.

Other options, while relevant in other contexts, do not specifically pertain to the preliminary requirement of searching for admitted carriers prior to accessing the surplus lines market.