What must a policy or certificate not contain to be approved?

For a policy or certificate to gain approval in the surplus lines market, it is essential that it does not contain provisions that are unfair or deceptive. This requirement ensures that consumers are protected from misleading terms and potential abuses within the contract. Fairness and transparency are fundamental in insurance practices, particularly in surplus lines where the products are often more complex and less regulated than standard insurance.

Provisions that could be viewed as unfair or deceptive undermine consumer trust and could lead to legal challenges against insurers. Thus, state regulators scrutinize such provisions closely to ensure that policyholders are treated justly and are not placed at a disadvantage due to obscure or misleading language.

Understanding this principle is crucial for anyone working with insurance products, particularly in surplus lines, as it emphasizes the necessity for clarity and fairness in all policy terms.