What type of charges must be disclosed to clients by surplus lines brokers?

Surplus lines brokers are required to disclose service fees to clients to ensure transparency in their operations. Service fees refer to the charges that brokers impose for their services in facilitating insurance coverage through non-admitted insurers. These fees can vary based on the complexity of the insurance placement and the services provided by the broker. Disclosing these fees is essential as it helps clients understand the total cost of the insurance transaction and also reflects the broker’s commitment to ethical practices in the insurance industry.

While other types of fees, such as hidden fees, admin fees, or processing fees, may exist within the broader context of insurance transactions, the specific obligation to disclose service fees is a notable requirement within the surplus lines brokerage framework. This transparency helps clients make informed decisions about their insurance options and fosters a trustworthy relationship between the broker and the client.