What must a licensed surplus lines broker keep records of?

A licensed surplus lines broker is required to maintain comprehensive records of each surplus line contract and related items. This is essential for several reasons.

First, keeping detailed records ensures compliance with regulatory requirements set by the state, which mandates that surplus lines brokers document transactions accurately. This is crucial because surplus lines insurance is often used for risks that standard insurers are unwilling or unable to cover, leading to unique contract specifics that need to be tracked.

Moreover, maintaining these records provides a clear reference for any transactional disputes that may arise between the broker, the insurer, and the insured. They serve as evidence of the terms and conditions agreed upon, which is important for both legal and operational purposes.

In contrast, the other options do not encompass the full scope of record-keeping obligations. While understanding the total premiums charged, the insurer's financial standing, or the insured's claims history may be important, they do not represent the complete and specific documentation required of surplus lines brokers concerning each contract. Thus, the best practice includes comprehensive records of the surplus line contracts and their relevant items to fulfill both legal responsibilities and service excellence in the industry.