What is required of brokers before seeking coverage from surplus lines insurers?

The requirement for brokers before seeking coverage from surplus lines insurers is primarily governed by the Diligent Search Statute. This statute mandates that brokers must conduct a diligent search for available coverage in the admitted market before approaching surplus lines insurers. The intent behind this requirement is to ensure that brokers first exhaust all options available in the traditional market to provide clients with solutions that are regulated and often more stable than surplus lines insurance.

By fulfilling the requirements of the Diligent Search Statute, brokers demonstrate that they have made reasonable efforts to find suitable coverage in the standard market, thus justifying the need to look for alternatives when those options are insufficient. This practice not only protects consumers by promoting transparency but also aligns with regulatory standards designed to oversee the surplus lines market.