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SURPLUS EXAM 2.0 WA QUESTIONS AND ANSWERS
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SURPLUS EXAM 2.0 WA QUESTIONS AND ANSWERS
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SURPLUS EXAM 2.0 WA QUESTIONS AND ANSWERSIn Washington, what types of actions must be reported by surplus lines brokers -
Answers -Surplus lines brokers must report transactions, premium taxes, and any
placements with non-admitted insurers.
How often are surplus lines brokers required to report transactions to the state
insurance commissioner? - Answers -Surplus lines brokers are required to report
transactions quarterly.
What is the purpose of surplus lines insurance in Washington State? - Answers -Surplus
lines insurance provides coverage for unique, complex, or high-risk exposures that are
not available in the admitted market.
How does surplus lines insurance benefit consumers and businesses in Washington
State? - Answers -Surplus lines insurance allows consumers and businesses to obtain
coverage for risks that admitted insurers may not be willing or able to cover, ensuring
that they can adequately protect their assets and liabilities.
: What records must surplus lines brokers maintain in Washington State? - Answers -
Surplus lines brokers must maintain records of all transactions, including documentation
of diligent search efforts, declinations from admitted insurers, and policy details for
placed coverage.
For how long are surplus lines brokers required to maintain records of transactions in
Washington State? - Answers -Surplus lines brokers must maintain records of
transactions for at least five years
What types of risks are eligible for coverage in the surplus lines market in Washington
State? - Answers -Risks eligible for coverage in the surplus lines market include unique,
complex, or high-risk exposures that cannot be adequately insured by admitted
insurers.
What is the diligent search requirement, and how does it relate to coverage eligibility in
Washington State? - Answers -The diligent search requirement mandates that a surplus
lines broker must first attempt to place coverage with admitted insurers before seeking
coverage in the surplus lines market. Coverage is eligible for the surplus lines market if
the broker can demonstrate that admitted insurers are unable or unwilling to provide the
necessary coverage.
In the context of Washington State surplus lines insurance, what is the difference
between an authorized insurer and an unauthorized insurer? - Answers -An authorized
insurer is licensed and regulated by the state and is a member of the state guaranty
fund. Unauthorized insurers, also known as non-admitted insurers, are not subject to
, the same regulations and are not members of the state guaranty fund, but they can
provide coverage for risks not available in the admitted market.
How are premiums for surplus lines insurance policies determined in Washington State?
- Answers -Premiums for surplus lines policies are determined by the insurer based on
the specific risk characteristics, and they are not subject to state rate regulations.
What type of document serves as evidence of insurance for a surplus lines policy in
Washington State? - Answers -A surplus lines insurance policy, binder, or certificate of
insurance serves as evidence of insurance for a surplus lines policy.
What is the surplus lines tax rate in Washington State? - Answers -The surplus lines tax
rate in Washington State is 2% of the gross written premium.
When are surplus lines tax payments due in Washington State? - Answers -Surplus
lines tax payments are due quarterly, along with the required tax report.
What conditions must be met before a surplus lines broker can procure coverage from a
non-admitted insurer in Washington State? - Answers -The broker must perform a
diligent search of the admitted market, document declinations from admitted insurers,
and confirm that the non-admitted insurer meets the state's eligibility requirements.
What is the role of the Washington Surplus Lines Association in the procurement
process? - Answers -The Washington Surplus Lines Association serves as a stamping
office, reviewing and stamping all surplus lines policies to ensure compliance with state
laws and regulations.
What document serves as evidence that a surplus lines policy has been properly placed
and certified in Washington State? - Answers -The stamped policy, bearing the stamp of
the Washington Surplus Lines Association, serves as evidence that the policy has been
properly placed and certified.
What is an exempt commercial purchaser in the context of surplus lines insurance in
Washington State? - Answers -An exempt commercial purchaser is a sophisticated
commercial insurance buyer that meets specific criteria, including having a full-time risk
manager, procuring at least $100,000 in property and casualty insurance premiums,
and having a net worth of at least $20 million.
How does the exempt commercial purchaser status affect the procurement process for
surplus lines policies in Washington State? - Answers -If a broker is placing coverage
for an exempt commercial purchaser, the broker is not required to perform a diligent
search of the admitted market or obtain declinations from admitted insurers.
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