Browse our Surplus Lines Compliance Glossary to explore definitions and key terms within the Excess and Surplus Lines industry.


Admitted CarrierAn admitted carrier or standard carrier is an insurance company that has received a license from the state department of insurance for the authority to write specific lines of insurance. These companies are also bound by rate and form regulations and are strictly regulated to protect policyholders from a variety of illegal and unethical practices, including fraud. Admitted carriers are also required to financially contribute to the state guarantee fund, which is used to pay for losses if an insurance carrier becomes insolvent or unable to pay the losses due to their policyholders.

AffidavitState required foms, signed by the agent and/or insured, summarizing the effort made to find coverage with an admitted insured. Some state affidavits describe the risks associated with SL/Non-Admitted carriers. These forms are filed with the states.

AgencyAn office where insurance is sold. It may be directed toward property and liability insurance, life and health insurance, or both. Also, it might be an independent organization or an insurer subsidiary

Agency feeA charge or flat fee per policy charged by the agency that does not change with the size of the policy.

AgentAn insurance agent is a person or organization who/that solicits, negotiates, or instigates insurance contracts on behalf of an insurer and can be independent or an employee of the insurer. Insurance agents are the legal representatives of insurers, rather than policyholders, with the right to perform certain acts on behalf of the insurers they represent, such as to bind coverage.

Alien InsurerAn insurer domiciled in and licensed under the laws of a country outside a given jurisdiction. For example, from a U.S. perspective, a Bermuda insurer would be an alien insurer.

Appointment – Authority given to an agent or agency to transact business on behalf of the insurer, and can include binding authority. A formal transaction may be required by some states.

Audit EndorsementAn endorsement derived from a survey of the financial records of a person or organization conducted annually (in most cases) to determine exposures, limits, premiums, etc.

Authorized or Unauthorized Insurer – An authorized insurer is licensed in a state. The license document is typically called a certificate of authority. As pertaining to surplus line, every state has certain surplus line insurers approved to do business in the non-admitted market or surplus line market in that state. An approved surplus line insurer is considered “unauthorized” because it has not been issued a certificate of authority. However, there are a few states (IL) that will issue a certificate of authority for a surplus line insurer to act as a non-admitted insurer only. For Broker Responsibility states, no non-admitted insurers are approved as this is placed solely under the responsibility of the surplus line broker to determine if the insurer meets the minimum financial requirements per the state statutes.


BinderA legal agreement issued by either an agent or an insurer to provide temporary evidence of insurance until a policy can be issued. Binders should contain definite time limits, should be in writing, and should clearly designate the insurer with which the risk is bound.

BordereauA report providing premium or loss data with respect to identified specific risks. This report is periodically furnished to a reinsurer by the ceding insurers or reinsurers.

BrokerAn insurance intermediary who/that represents the insured rather than the insurer. Since they are not the legal representatives of insurers, brokers, unlike independent agents, often do not have the right to act on behalf of insurers, such as to bind coverage.

Broker Responsibility State – Refers to those states that do not maintain an “official” list of eligible surplus line carriers for that state; whereby, the broker is responsible for determining if the surplus line carrier meets that state’s financial criteria.


CarrierAn insurance or reinsurance company that insures or “carries” the insurance or reinsurance.

Courtesy FilingA courtesy filing is when an agent licensed in a state other than your own submits the taxes due for a surplus lines policy on your behalf . Any agent with a resident surplus lines license can file taxes for another agent if the state allows courtesy filing.


Declaration pageThe front page (or pages) of a policy that specifies the named insured, address, policy period, location of premises, policy limits, and other key information that varies from insured to insured. The declarations page is also known as the information page. Often informally referred to as the “dec” or “dec page.”

DeclinationThe act of rejecting an application for insurance.

Description of RiskDefinition, outline, or description of type of business being insured; description of operations.

Diligent Search/Diligent EffortA surplus lines regulatory requirment establishing that coverage for a risk is unavailable from admitted insurers. The form (affidavit) to be completed confirming that an admitted carrier declined the risk.

Domestic Insurer – An insurer admitted by and formed under the laws under the state in which insurance is written.


EndorsementAn insurance policy form that either changes or adds to the provisions included in one or more other forms used to construct the policy. Insurance policy endorsements may serve any number of functions, including broadening the scope of coverage, limiting or restricting the scope of coverage, clarifying the application of coverage to some unique loss exposure, adding other parties as insureds, or adding locations to the policy.

Excess/Surplus Line Insurance – Any type of coverage that cannot be placed with an insurer admitted to do business in a certain jurisdiction. Risks placed in the excess/surplus line markets are often sub-standard as respect to adverse loss experience, high risk, unusual, or unable to be placed in the admitted market.

Exempt Commercial Insured/Industrial Insured Exemption – An insured who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer or the services of a regularly and continuously retained qualified insurance consultant. Generally, this means that the Exempt Commercial Insured is exempt from certain regulatory requirements. *In some states the industrial insured was replaced by the ECP and the requirements may be different. Some states have both.

Export ListA compilation of coverages that can be “exported” to non-admitted insurers without first fulfilling the diligent search requirements.


Filing Effective DateTypically same as policy effective date.

Foreign InsurerFrom the U.S. perspective, an insurer domiciled in the United States but outside the state in which the insurance is to be written. In effect, it is a domestic insurer doing business outside of the state in which it is domiciled. See also Alien insurer.


Home State – The state in which the insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; or if 100% of the insured risk is located out of the insured’s principal place of business or residence, then the state in which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.


Independently Procured Insurance (PCI) – Insurance procured directly by an insured from a non-admitted carrier without the use of a surplus line broker. IPC coverage is usually obtained by a risk manager of a commercial insured, whereby the commercial insured purchases their own insurance through an in-house risk manager who transacts insurance directly with the surplus line carrier.

Individual FilingsThese are required Surplus Lines filings submitted to the state. The due date of these filings are dependent on the Policy Effective Date or Endorsement Date.


Line of BusinessA general classification of insurance industry business—for example, liability, property, inland marine, errors and ommissions, commercial auto, etc.


Managing General Agent (MGA)/Managing General Underwriter – Not authorized to sell insurance to an insured, but rather acts as the middleman between the company and the independent agent or agency. An MGA may be given binding authority by an insurer. A broker that has both underwriting and claims authority or reinsurance authority could meet the statutory definition of managing general agent, which triggers additional regulatory compliance obligations.


National Association of Insurance Commissioners (NAIC)A trade association of state insurance commissioners that issues model insurance acts that states can adopt. The NAIC accredits states that have enacted specific insurance legislation and demonstrate adequate regulatory oversight over the insurers they license.

New PolicyA new policy, contract of insurance, written for a specific risk.

Non-Admitted and Reinsurance Reform Act (NRRA) – No state other than the home state of an insured may require any premium tax payment for non-admitted insurance, and the placement of non-admitted insurance shall be subject to the statutory and regulatory requirements solely of the insured’s home state.

Non-Admitted Carrier/Excess & Surplus Lines (E&S) CarrierAn E&S carrier is not required to be licensed by the state, but is allowed to do business in that state. Sometimes, E&S carriers are also referred to as non-admitted or unlicensed carriers; however, E&S carriers are financially stable companies that are regulated in other ways. Excess and Surplus line carriers are not bound by most of the rate and form regulations imposed on standard market companies, allowing them the flexibility to change the coverage offered and the rate charged without time constraints and financial costs associated with the filing process. This is good for both the company and the policyholder. They are not protected by the state guarantee fund.

Non-Admitted Insurer (Market) – A company not licensed to do business in a particular state. In case of insolvency, the policyholder or claimant is not covered under the state’s insurance guaranty association.


Package PolicyA combination policy providing several different coverages. Usually refers to a policy providing both general liability insurance and property insurance. Premium discounts are usually allowed to reflect cost efficiencies.

PolicyA written contract of insurance between the insurer and the policyholder. It is typically composed of a declarations page, policy form, and endorsements or riders that amend the policy form.

Policy Effective DateThe date on which an insurance binder or policy goes into effect and from which time protection is provided.

Policy feeA one-time charge or flat per policy charge that does not change with the size of the policy.

Policy limits – 

PremiumThe amount of money an insurer charges to provide the coverage described in the policy or bond.

Premium EndorsementAn endorsement that generates an additional premium due to a policy change endorsement or audit.

ProducerA term commonly used for an agent, broker, or other insurance representative who has responsibility for selling insurance.


Renewal PolicyAn insurance policy issued to replace an expiring policy.

Retailer – Sells insurance to the insured.

Return Premium EndorsementAn endorsement for the amount due the insured if the actual cost of a policy is less than what the insured has previously paid—for example, if the limits are reduced, the estimated exposure at inception is greater than the audited exposure, or the policy is canceled.

Risk(1) Uncertainty arising from the possible occurrence of given events. (2) The insured or the property to which an insurance policy relates.

Risk Purchasing Group (RPG)A group formed in compliance with the Risk Retention Act of 1986 authorizing a group of insureds engaged in similar businesses or activities to purchase insurance coverage from a commercial insurer. This is in contrast to a risk retention group (RRG), which actually bears the group’s risks rather than obtaining coverage on behalf of group members.


Service of SuitIt is very common to find in insurance policies issued by the London market to US policyholders a service of suit clause under which the insurers agree to submit to the jurisdiction of any court of competent jurisdiction in the US.

Stamping feeSurplus lines stamping offices facilitate and encourage compliance with state laws and regulations regarding surplus lines placement. Stamping office expenses are funded by the stamping fee.

State PaymentsPayments made to the states which includes any Surplus Lines Taxes, Stamping Fees, and other services charges. Amounts and/or percentage of SL Taxes, Stamping Fees, and Service Charges vary by state.

State ReportsSummation of policy details written through a specific reporting period. Types of reports include: Annual, Annual – Zero, Semi-Annual, Semi-Annual Zero, Quarterly, Quarterly – Zero, Monthly, Monthly – Zero.

State StampA “stamp” – verbiage – required by states to be included on an issued surplus lines insurance policy.

Surplus LinesRisks placed with non-admitted insurers.

Surplus Lines Broker – Is the responsible party that ensures all aspects of the surplus line placement are compliant with specific state regulations. This individual or agency is also responsible for reporting the placement to the applicable state as required by that state’s statutes. The surplus line broker should be very aware of each state’s varied requirements with regard to due diligence, affidavit filings and tax reporting.

Surplus Lines TaxState tax associated with the surplus lines premiums; new business, renewals, endorsements, audits.

SyndicateThe business written at Lloyd’s is brought to specialist syndicates, who price and underwrite risk, via brokers and coverholders. Much of the capital available at Lloyd’s is provided on a subscription basis – where Lloyd’s underwriters join together as syndicates and where syndicates join together to underwrite risks and programs. This kind of collaboration, combined with the choice, flexibility, and financial certainty of the market, makes Lloyd’s the world’s leading insurance platform.

Syndicate ListA list of syndicates trading within the Lloyds of London market.


Tag/TIQFiling error generated from state when incorrect or unmatching data has been received during the filing process.

Taxable FeesAgency, Broker or policy fees that are taxable by the Surplus Lines Offices.


White List – Many states provide a list of approved or authorized surplus line carriers for that state; whereby, surplus line business can only be written through one of the carriers listed for exposures in those states. States determine if a carrier is approved or authorized by meeting certain financial criteria. So the ‘White List’ varies by state. A carrier can be approved in one state and not approved in another state or a carrier can be non-admitted in one state and admitted in another.

Wholesaler – Does not sell insurance to the insured, but rather to an independent agent or agency, but can also act as a retail agent.


Zero FilingReport sent to Surplus Lines office stating “Zero” – no surplus lines filings for the reported period

1,000,000 +
Transactions Filed/yr
States & Territories
in Premiums Processd/yr
15,000 +
Licenses Managed
Texas Surplus Lines Association

Helping our clients simplify surplus line tax filing, one agency at a time.


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