P&CMAmedium
Under M.G.L. c. 175 §168, a Massachusetts special insurance broker may place coverage with an eligible unauthorized (surplus lines) insurer only after:
AObtaining written approval from the Governor
BPosting a $1 million surety bond with the State Treasurer
Conducting a diligent search of the admitted market confirming the coverage is not procurable from authorized MA insurers
DAttorney General approval of the surplus-lines form and transaction before the broker may bind coverage with the unauthorized insurer
Why this is the answer
M.G.L. c. 175 §168 requires the licensed special broker to make a good-faith effort to place the coverage in the admitted market first. Only after confirming unavailability may placement go to an eligible nonadmitted insurer, and the broker must collect the 4% surplus lines premium tax.
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