What must surplus lines insurers disclose about their operation?

Surplus lines insurers are required to disclose their status of being admitted or non-admitted. This distinction is crucial in the insurance industry because it informs potential policyholders whether the insurer is licensed and regulated by the state's insurance department (admitted) or if it operates outside of those regulations (non-admitted). Admitted insurers typically offer policies that include state-backed protections, while non-admitted insurers fill gaps in coverage that admitted insurers might not provide, often with more specialized or higher-risk options.

The necessity for this disclosure helps maintain transparency in the market and allows consumers to make informed decisions about the stability and legitimacy of the insurer they are choosing to work with. Understanding whether an insurer is admitted or non-admitted can affect the financial and regulatory security that a policyholder can expect.