Which statement best defines a surplus lines broker?

A surplus lines broker plays a pivotal role in the insurance market by securing coverage from nonadmitted insurers. These are insurance carriers that are not licensed to do business in a particular state but provide coverage for risks that admitted insurers may not be willing to underwrite. Surplus lines brokers specialize in this area because they can offer unique and customizable coverage options that are not typically available through standard policies from admitted carriers.

These brokers must adhere to specific regulations. For instance, they are required to file a surplus lines declaration with state insurance departments, ensuring that they are operating within legal guidelines. Their expertise is especially valuable when dealing with unusual or higher-risk insurance needs where traditional insurers might refuse coverage.

Other options, such as working with only direct consumers or being limited to direct marketing or only offering products from admitted insurers, do not capture the primary function of a surplus lines broker. They are defined by their focus on the nonadmitted market, which allows them to fill coverage gaps and cater to clients with specialized insurance needs.