Where must all surplus lines insurers be licensed?

Surplus lines insurers must be licensed in their home state to legally conduct business. This means they must comply with the regulatory requirements set by the state in which they are incorporated or domiciled. The home state licensing serves to ensure that the insurer is authorized and meets the financial and operational requirements dictated by state laws, which may include maintaining certain levels of reserves and adhering to specific operational protocols.

Once licensed in their home state, surplus lines insurers can offer coverage in other states, including Florida, under the surplus lines provisions, provided that the coverage is not available from admitted insurers in those states. This is important because it allows for flexibility in filling coverage gaps that standard admitted insurers may not fill.

While it might seem logical for insurers to be licensed in every state they operate within or where they have clients, the surplus lines market is specifically designed to cater to situations where traditional insurance isn't available. This regulatory framework allows for more creative coverage solutions while still maintaining accountability through the requirement of being licensed in their home state.

Therefore, being licensed in the home state establishes the foundation necessary for surplus lines insurers to function legally across various jurisdictions.