Which activity requires licensing as a surplus lines agent?

Which activity requires licensing as a surplus lines agent?

• A. Supervising unlicensed staff who perform administrative tasks
• B. Negotiating surplus lines contracts
• C. Receiving a commission based on surplus lines premiums
• D. All of the above

Answer: (D)

Licensing ensures that anyone involved in placing surplus lines insurance and handling related compensation is qualified and regulated. Negotiating surplus lines contracts is prohibited without a license because it involves arranging coverage with surplus lines carriers. Receiving a commission on surplus lines premiums is also restricted to licensed individuals since compensation is tied to an insurance transaction. Supervising unlicensed staff who perform administrative tasks is included because someone supervising is responsible for ensuring those activities comply with the law, and that responsibility rests on a licensed agent when surplus lines work is involved. Taken together, all of the listed activities require licensing.

Licensing ensures that anyone involved in placing surplus lines insurance and handling related compensation is qualified and regulated. Negotiating surplus lines contracts is prohibited without a license because it involves arranging coverage with surplus lines carriers. Receiving a commission on surplus lines premiums is also restricted to licensed individuals since compensation is tied to an insurance transaction. Supervising unlicensed staff who perform administrative tasks is included because someone supervising is responsible for ensuring those activities comply with the law, and that responsibility rests on a licensed agent when surplus lines work is involved. Taken together, all of the listed activities require licensing.