What document must be secured before a surplus lines transaction can proceed?

Before a surplus lines transaction can proceed, it is essential to secure a diligent search or "due diligence" statement. This document demonstrates that the broker has conducted a thorough search for available coverage with licensed insurers before seeking a policy through a surplus lines insurer. The purpose of this requirement is to ensure that surplus lines insurers are only utilized when there are no acceptable alternatives available from admitted carriers, maintaining market integrity and consumer protection.

The diligent search is vital in ensuring compliance with regulatory requirements in Louisiana, as it confirms that the broker has acted in good faith and has explored all possible options for the client. This step helps to foster confidence in the surplus lines market and assures the relevant authorities that all necessary efforts have been made to obtain coverage from admitted insurers first.

In contrast, other documents listed, such as a letter from the insurance regulator, a premium finance agreement, or a coverage approval document, do not specifically address the necessity of demonstrating due diligence in seeking alternatives, making the diligent search statement a key component of the surplus lines transaction process.