Indiana Surplus Lines key terms

Insurance placed on a risk in Indiana with an insurer that is not admitted in the state, after the producer has documented that admitted insurers would not accept the risk.

An insurer that does not hold a license or certificate of authority to transact insurance in Indiana. Surplus lines placement with such an insurer is permitted only when the surplus lines law is followed.

An insurer not admitted to do business in the state where the insured risk is located; for surplus lines use, it must also satisfy eligibility standards.

An insurer licensed by the Indiana Department of Insurance to transact insurance in the state and subject to its solvency and market-conduct regulation.

The state agency that regulates insurers and producers, licenses surplus lines producers, receives surplus lines reports, and enforces Indiana insurance laws.

The official who heads the Indiana Department of Insurance and has authority to adopt rules, issue licenses, examine records, and impose penalties under the surplus lines law.

The body of Indiana statutes and regulations governing placement of insurance with nonadmitted insurers, producer licensing, insurer eligibility, premium tax, and disclosure duties.

A documented, good-faith effort by the producer to obtain the requested coverage from authorized insurers before placing the risk with a nonadmitted insurer.

A refusal by an authorized insurer to quote, bind, or accept a risk, which the producer records as evidence supporting a surplus lines placement.

Records identifying the admitted insurers contacted, the coverage requested, the responses received, and the reason each declined or could not provide the needed coverage.

A list of insurance classes or risks that may be placed with eligible nonadmitted insurers without an individual diligent search for each risk.

A nonadmitted insurer that meets Indiana's standards for capital, surplus, authorization elsewhere, or NAIC listing, allowing it to be used for surplus lines placements.

An insurer organized under the laws of a country outside the United States; it may be used for surplus lines only if it meets eligibility requirements such as NAIC listing and trust fund standards.

A National Association of Insurance Commissioners publication listing alien insurers that meet specified financial and regulatory standards and are eligible for surplus lines use in many states.

Assets held in the United States by an alien insurer, typically in trust for the benefit of policyholders and claimants, as a condition of surplus lines eligibility.

A licensed insurance producer who holds the authority to place surplus lines coverage and who is responsible for diligent search, disclosure, tax, and recordkeeping duties.

An authorization issued by the Indiana Department of Insurance that permits a producer to negotiate and place insurance with eligible nonadmitted insurers.

A person licensed to sell, solicit, or negotiate insurance; in surplus lines, the producer of record owes statutory placement and reporting duties.

The duty to keep surplus lines transaction records, including search evidence, declinations, policies, and tax data, available for examination for the period Indiana law requires.

A written statement signed by the surplus lines producer confirming that a diligent search was made and that the placement complies with applicable requirements.

A tax imposed on surplus lines premiums, generally collected by the surplus lines producer and remitted to the state, in place of the premium tax paid by admitted insurers.

The total premium charged for a surplus lines policy before deductions; it is the base on which premium tax is commonly calculated.

An organization authorized in some states to review surplus lines policies, verify compliance, and collect premium tax or stamping fees on behalf of the state.

A report or submission to the Indiana Department of Insurance or another designated body showing surplus lines premiums written, taxes due, and related transaction details.

The process of determining which state is entitled to surplus lines premium tax when a risk involves more than one state, often based on the insured's home state.

The state where the insured maintains its principal place of business or residence; it generally governs surplus lines tax and regulatory compliance under federal law.

The Nonadmitted and Reinsurance Reform Act, a federal law that simplified multistate surplus lines taxation and set rules for home-state regulation and commercial purchaser exemptions.

A sophisticated commercial buyer meeting statutory size and professional-buyer criteria, allowing surplus lines placement without a full diligent search under federal standards.

A large commercial insured that meets statutory criteria for net worth, employees, or premium size and may qualify for reduced surplus lines placement requirements.

A written statement to the insured explaining that the insurer is not admitted in Indiana, is not subject to the state's guaranty fund, and may not be regulated in the same way.

Laws and regulatory practices intended to ensure buyers understand surplus lines risks, receive required notices, and are not misled about insurer status or coverage protections.

The transaction of insurance in Indiana by an insurer without authority to do so; it is generally prohibited except when placed under the surplus lines law.

Temporary written or oral evidence of insurance coverage issued before the policy is delivered; in surplus lines, it must identify the nonadmitted insurer and coverage terms.

The condition in which an insurer cannot meet its financial obligations; surplus lines insureds generally have no guaranty fund protection if a nonadmitted insurer fails.

A license issued by a state allowing an insurer to transact insurance there; an insurer lacking one in Indiana is nonadmitted for Indiana purposes.

The producer designated by the insured to represent it in placing or servicing coverage, including surplus lines placements and related notices.