Understanding Licensed Surplus Lines Insurance Brokers in the U.S.
Surplus lines insurance also called excess and surplus lines covers risks that admitted carriers are unwilling or unable to write. These include unusual exposures, high-hazard operations, and emerging industries where loss data is thin. In 2024, the U.S. surplus lines market surpassed $129 billion in direct written premium, accounting for roughly 12% of the total property and casualty market.
Why Surplus Lines Brokers Require Separate Licensing
Every U.S. state mandates that surplus lines placements be handled by a broker holding a specific surplus lines license, separate from a standard property-casualty producer license. The surplus lines broker is the sole regulated entity in the transaction and bears responsibility for:
- Diligent Search
- Documenting that coverage was declined or unavailable in the admitted market before placing with a non-admitted carrier.
- Eligible Insurer Verification
- Confirming that the surplus lines carrier meets the state financial requirements and appears on the state approved or eligible insurer list.
- Tax Remittance
- Collecting and remitting surplus lines premium taxes to the home state, as required under the Nonadmitted and Reinsurance Reform Act (NRRA).
Market Structure and Key Players
The wholesale distribution channel is dominated by a handful of large firms. Amwins Group, headquartered in Charlotte, NC, is the largest wholesale broker in the nation. RT Specialty (a Ryan Specialty company) operates from Chicago with over 40 offices nationwide. CRC Group, with more than 100 offices, handles property, casualty, and professional liability placements at virtually any scale. Burns and Wilcox, founded in 1969 in Michigan, is the largest independent wholesale broker in North America.
Beyond the majors, thousands of smaller specialty brokers operate at the regional and state level, often focusing on niche classes such as cannabis, cyber liability, wildfire-exposed property, or entertainment risks.
How Licensing Varies by State
While the NAIC and the National Insurance Producer Registry (NIPR) provide a standardized framework, each state sets its own surplus lines licensing requirements. Common requirements include:
| Requirement | Typical Standard |
|---|---|
| Prerequisite License | Active P and C producer license in the home state |
| Experience | 1-3 years as a licensed P and C agent or broker |
| Examination | Surplus lines specific exam (varies by state) |
| Continuing Education | State-mandated CE credits, often including surplus lines topics |
| Bond Requirement | Some states require a surety bond (e.g., $50,000 in Florida) |
Regulatory Oversight
The Wholesale and Specialty Insurance Association (WSIA), with approximately 735 member firms, serves as the primary industry trade group. State-level surplus lines stamping offices such as the Surplus Line Association of California and the Florida Surplus Lines Service Office process filings, collect taxes, and maintain public records of placements.