What disclosure information is essential before selling a surplus lines policy?

Before selling a surplus lines policy, it is crucial to disclose the non-admitted status of the insurer and its implications. Surplus lines insurance is typically written by insurers that are not licensed in the state where the policyholder resides. This means that these insurers do not have the same regulatory oversight as admitted insurers, which can impact the policyholder's rights and recourse in the event of a dispute or insolvency.

Understanding the non-admitted status is essential for the policyholder, as it informs them that certain protections provided by state insurance regulations, such as guaranty funds, may not be available. This knowledge allows the policyholder to make an informed decision regarding the coverage and the reliability of the insurer, considering the increased risks associated with non-admitted carriers.

The other options, while they could potentially be relevant in certain circumstances, do not provide the critical context necessary for the policyholder to understand the unique aspects of surplus lines insurance. For example, financial records of the insurer or detailed claims history could be important for evaluating the insurer's performance but do not address the fundamental legal standing of the non-admitted insurer. Similarly, the agent's license information is not directly related to the understanding of the policy being sold and its implications. Thus,