What must be included in the surplus lines policy documentation?

The inclusion of coverage details, premiums, and the broker's diligent search declaration in the surplus lines policy documentation is essential for several reasons. First, it provides transparency and clarity about the specific terms and conditions of the coverage being offered. Coverage details ensure that the policyholder understands what risks are covered and to what extent. Secondly, the premium information is critical as it outlines the cost of the insurance, allowing policyholders to assess the financial implications of their coverage.

The broker's diligent search declaration is also a vital component. This declaration signifies that the broker has conducted a thorough search for available insurance options in the admitted market before seeking coverage from a surplus lines insurer. This is a regulatory requirement designed to protect consumers, ensuring they are informed that standard coverage options were explored before moving to surplus lines, which typically offer coverage that might not be available through licensed insurers.

In summary, having this comprehensive information in the policy documentation fosters informed decision-making by the policyholder and helps maintain regulatory compliance within the surplus lines insurance market.