Which of the following is true about Open Market Correspondents?

Open Market Correspondents play a vital role in the insurance industry, especially in the context of surplus lines. One key aspect of their operation is that they must be registered by Lloyd's attorney-in-fact in certain territories. This registration is crucial as it ensures that the correspondent adheres to the regulatory standards necessary for conducting business in those specific areas. It addresses compliance and makes certain that brokers and insurers follow local laws while placing surplus lines insurance.

This requirement for registration with Lloyd's attorney-in-fact highlights both the legitimacy and the regulatory framework that governs Open Market Correspondents, ensuring that they operate consistently within the legal boundaries of different states or territories. This setup allows for a structured approach to surplus lines underwriting, facilitating a more manageable and secure insurance market.

In contrast, the other options don't correctly represent the nature and operational requirements of Open Market Correspondents, making them less accurate in detailing their role and function within the broader insurance landscape.