What term describes actions taken by an agent to ensure compliance with surplus lines regulations?

The term "due diligence" best encapsulates the actions taken by an agent to ensure compliance with surplus lines regulations. Due diligence refers to the care that a reasonable person takes to avoid harm to other persons or their property. In the context of surplus lines, it involves the thorough investigation and attention to the rules governing surplus lines insurance, which may include verifying that the insurer is authorized to sell the policy in Texas, confirming that the coverage is not available through standard markets, and ensuring proper documentation and reporting.

This proactive approach helps agents mitigate risks associated with non-compliance, protecting both themselves and their clients from potential legal issues. It emphasizes the importance of comprehensive knowledge and adherence to regulatory standards crucial for operating in the surplus lines market.