What does Regulation 41 require from insurers in the surplus lines market?

Regulation 41 emphasizes the importance of diligent efforts by brokers to place business with surplus lines carriers. This regulation was established to ensure that brokers actively seek out and try to place coverage with admitted carriers before resorting to surplus lines options, which are typically utilized when standard coverage is not available.

The focus on "diligent efforts" means that brokers must thoroughly explore options and document their reasons for choosing a surplus lines carrier over an admitted one. This is crucial for maintaining a fair market and ensuring that surplus lines are used appropriately, reflecting a commitment to consumer protection and proper risk management. By requiring brokers to show diligence in their placement efforts, Regulation 41 helps to regulate transactions in a market that can sometimes be less scrutinized than the admitted market.