What must surplus lines brokers provide to policyholders?

Surplus lines brokers play a critical role in the insurance market, particularly when standard insurance options are insufficient or unavailable for a client’s needs. One of the primary responsibilities of surplus lines brokers is to ensure transparency and fairness in the transactions they facilitate.

Providing credit for return premiums and dividends directly aligns with this responsibility because it is important for clients to receive any appropriate refunds or earnings that arise from their policies. When a policy is canceled or if there are overpayments, the surplus lines broker must ensure that these amounts are credited to the policyholders. This practice upholds the expectation of accountability and helps clients feel secure in their financial dealings with their insurance coverage.

Meanwhile, the other options present commitments that are not typical responsibilities of surplus lines brokers. For instance, promising additional coverage or offering premium discounts may not always be feasible or appropriate, as the services provided are based on the specific risks that are not fully addressed by licensed insurers. Recommendations to switch to authorized insurers is also not a primary function of surplus lines brokers, given that their role centers around the placement of business with non-admitted insurers when necessary. Thus, the emphasis on credits for return premiums and dividends is essential in establishing trust and integrity within the surplus lines insurance process.