When must a surplus lines producer file an affidavit with the state?

A surplus lines producer is required to file an affidavit with the state when placing coverage with a non-admitted insurer. This is because non-admitted insurers are those that are not licensed in the state to conduct insurance business but can offer coverage in certain situations where admitted insurers cannot or do not provide the necessary coverage.

The purpose of the affidavit is to document and confirm the circumstances under which the surplus lines coverage is being procured. This helps maintain regulatory oversight and ensures that the surplus lines market operates in compliance with state laws. It is a mechanism to ensure that producers are following the proper practices when dealing with non-admitted carriers, as these policies are often subject to different scrutiny compared to those issued by admitted carriers.

In contrast, the other options do not pertain to the necessity of filing an affidavit. Renewing an insurance license, placing coverage with an admitted insurer, and changing insurance carriers do not involve the same regulatory reporting requirements as those necessary for transactions with non-admitted insurers.