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FL Surplus Lines Insurance Study Guide Questions and Answers Graded A+
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FL Surplus Lines Insurance Study Guide
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FL Surplus Lines Insurance Study GuideWhat is Florida’s Cap guarantee fund set at? - answer$300,000
How is the Guarantee Fund Funded? - answer Admitted insurers are assed a prorated
portion based on market share
Admitted Insurer (Authorized) - answer Licensed to do insurance business in the
insured's home state
Non-Admitted Insurer (unauthorized) - answer Not licensed to do business in the
insureds home state
Surplus Lines Insurance- what is it? - answer a mechanism that allows US consumers
to buy property/liability insurance from non-admitted insurers when consumers are
unable to purchase the coverage they need from admitted insurers.
Why is surplus lines business besieged with a negative image? - answer It is not well
understood and is only a small part of the overall marketplace.
What must surplus lines insurance memebers strive for? - answerTo be Ethical,
Competent and firm in their convision as a valuable service to the marketplace.
What are some of the reasons surplus lines carriers are needed these days? -
answerEmerging Technoloigies, New Business Practices, Changing Legal Enviornment
that requires a fast response, unusual business activities, Poor losses
During the 1800 insurance carriers: - answerhad not laws to follow, were chartered-not
licensed, and claim payments were not guaranteed
Why might it not make senese for an admitted carrier to write a risk? - answerNot cost
effective to develop the underwriting skills to analize the risk or the risk might be a weird
place
The regulatory framework for surplus lines protects both consumers and states in the
following ways: - answerAccess carriers without leaving the state , Uses specially
trained and licensed agents, Est. a system for collecting Taxes, Gives the states control
of eligibility standards
Independently Procured Coverage (IPC) - answerInsured contacts Non Admitted carrier
directly (not agent involved)
, Unauthorized Insurers Acts - answerGovern IPC (2/3 of States have enacted these
statues)
How are taxes worked for Independently Procured Coverage (IPC) - answerTax the
Transaction instead of regulating the IPC
Who Pays the Taxes for Independently Procured Coverage? - answerThe insured
What Tax rate is usually used on Independently Procured Coverage? - answerSame
Rate as the Surplus Lines Tax- this way there is no Tax advantage over choosing a
broker to get their coveage
Without the Surplus Lines Market- what limited options does the insured have? -
answerSelf Insurance, Risk Retention Group/Captive, No Coverage
Where must all srplus lines insurers be licensed? - answerIn their home state (whether
the US or another Country)
Eligible Surplus Lines Insurer - answerUnauthorized Insurer which as been made
eligible by the Office of Insurance Regulation (OIR) to issue coverage under Florida
Surplus Lines Law
Domestic Insurer - answerany insurer domiciled in the state of Florida
Surplus Lines Insurers can be classified into 3 catories: - answer1. US domiciled
insures writing admitted business in some jurisdiction and surplus lines in others 2.US
Domiciled insurers specifically formed to write surplus lines insurance and to write
admitted insurance only in their jurisdication 3.Alien insurers who write US surplus Lines
insurance
Foreign Insurer - answerAny insurer that is authorized or eligible to do business in this
state but that is not domiciled in this state
Alien Insurer - answerAny insurer other than a domestic or foreign insurer
Higher Standards are imposed on what type of insurer? - answerAlien
What are the two approaches states use to identify acceptable non admitted insurers -
answer1. Name is listed on eligible insurers by FSLSO 2. Make it the Brokers
Responsibility
Black List - answerLists the surplus lines insurers that have been determined to be
ineligible for surplus lines placement by the states insurance regulators
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