What is required if a broker finds coverage through an insurer not already on the approved list?

The requirement for obtaining permission from the Department of Insurance (DOI) before writing coverage through an unapproved insurer is rooted in regulatory practices that ensure consumer protection and the financial stability of insurance providers. The DOI evaluates insurers that are not on the approved list to determine their financial responsibility and ability to honor claims. This step is crucial because it prevents brokers from selling potentially risky policies that could leave consumers unprotected.

When a broker identifies an insurer not already approved, they must seek permission from the DOI to ensure that the company meets the necessary standards and regulations set forth by the state. This process helps maintain a level of oversight over surplus lines insurance, which can include riskier or less conventional coverage. Ensuring that all insurers adhere to established regulatory standards is essential for the integrity of the insurance market and protection of policyholders.

This regulatory requirement does not allow for immediate policy writing without prior DOI consent, nor does it necessitate the cancellation of existing policies or the payment of additional fees without prior steps being taken to secure approval from the DOI.