What financial threshold must surplus lines insurers meet in Florida?

What financial threshold must surplus lines insurers meet in Florida?

• A. $5 million
• B. $10 million
• C. $15 million
• D. $20 million

Answer: (C)

The financial threshold that surplus lines insurers must meet in Florida is established to ensure that these companies maintain sufficient financial strength to meet their obligations to policyholders. Specifically, surplus lines insurers are required to have a minimum surplus of $15 million. This amount serves as a measure of the insurer's ability to pay claims and to remain solvent, particularly given that surplus lines insurance typically involves higher risks and may cover non-standard or specialty risks that admitted insurers do not. By setting this threshold, Florida aims to protect consumers who purchase surplus lines insurance by ensuring that only financially viable companies are permitted to operate in this market. This requirement helps to maintain the integrity of the surplus lines insurance system and provides some reassurance to policyholders regarding the reliability of their coverage.

The financial threshold that surplus lines insurers must meet in Florida is established to ensure that these companies maintain sufficient financial strength to meet their obligations to policyholders. Specifically, surplus lines insurers are required to have a minimum surplus of $15 million. This amount serves as a measure of the insurer's ability to pay claims and to remain solvent, particularly given that surplus lines insurance typically involves higher risks and may cover non-standard or specialty risks that admitted insurers do not.

By setting this threshold, Florida aims to protect consumers who purchase surplus lines insurance by ensuring that only financially viable companies are permitted to operate in this market. This requirement helps to maintain the integrity of the surplus lines insurance system and provides some reassurance to policyholders regarding the reliability of their coverage.