What must surplus lines brokers do if they lack a licensed insurer for a risk?

Surplus lines brokers play a crucial role when it comes to insuring risks that cannot be covered by admitted insurers. When brokers lack a licensed insurer for a specific risk, they must assess that risk to determine whether it qualifies for surplus lines coverage. This evaluation involves determining whether the coverage cannot be obtained from any admitted insurance market due to reasons like high risk or unique circumstances.

If the risk is deemed eligible for surplus lines, the broker can then proceed to place the insurance with a non-admitted or surplus lines insurer. This process effectively allows individuals or businesses with atypical needs or risks to secure necessary coverage that would otherwise be unavailable in the standard insurance market.

The other options suggest actions that would either delay the process or direct the client away from necessary coverage. For example, reassessing coverage requirements does not address the immediate need for a policy, while directing clients to seek standard insurers fails to acknowledge that the risk may not be insurable through those avenues. Filing a report with the insurance department typically involves regulatory compliance issues, which are important but secondary to the immediate concern of securing coverage for the client.