Are surplus lines insurance policies regulated by state laws?

Surplus lines insurance policies are indeed regulated by state laws, but the degree and nature of that regulation can vary, particularly when it comes to non-admitted insurers. Non-admitted insurers operate outside of the state’s regular licensing requirements, which means they are not subject to the same level of rate approval and regulatory oversight that admitted insurers face. State lawmakers recognize the need for flexibility in the surplus lines market, allowing these non-admitted products to cater to unique risks that are often not covered by traditional insurance.

Each state has specific regulations to ensure that surplus lines insurance remains a viable option for consumers while still providing some level of protection and accountability. Thus, while these policies are regulated, the specifics can differ significantly between admitted and non-admitted insurers, acknowledging the unique nature of the surplus lines market.