Can surplus lines insurers refuse to renew policies?

Surplus lines insurers do have the right to refuse to renew policies, and this decision is primarily guided by their underwriting guidelines. These guidelines establish the criteria that the insurer uses to evaluate risks and determine the terms of coverage. Factors that could lead to non-renewal may include changes in the risk profile of the insured, such as worsened conditions or claims history, or changes in market conditions that may affect the insurer's ability to provide coverage.

The ability to refuse renewal offers flexibility to surplus lines insurers, allowing them to manage their risks effectively. This is an essential characteristic of the surplus lines market, which typically serves higher-risk individuals or businesses that may not be accommodated by standard insurers.

Thus, the correct answer reflects the operational practices of surplus lines insurers, emphasizing their reliance on underwriting guidelines as the basis for policy renewal decisions.