New York Partner Zachary Lerner
authored an article for Insurance Journal discussing the complex role of surplus lines brokers in insurance distribution and whether they can legally act in the capacity of agents on behalf of surplus lines insurers under various state laws. While a growing number of nonadmitted insurers have been engaging surplus lines brokers in order to legally distribute their products, the fiduciary duties owed by these brokers to their customers may cause inherent conflicts of interests, Lerner points out.
“While some states do recognize the concept of a surplus lines agent, many states do not have a place for agents within their surplus lines frameworks. It is incumbent on insurance producers and surplus lines carriers… to study the laws of the state where a policyholder resides to determine how to proceed when establishing a business partnership,” he writes.
To read the full article, click here