With which type of companies do surplus lines producers place coverage?

Surplus lines producers specialize in placing coverage with nonadmitted companies. Nonadmitted insurers are those that are not licensed to operate in a particular state, and they provide insurance coverage for risks that admitted companies might not be willing or able to underwrite. This often includes unique, high-risk, or hard-to-place risks that do not fit the standard market criteria.

Surplus lines regulations allow these producers to offer coverage options that are not otherwise available in the admitted market, making it an essential component of the insurance industry for complex or unconventional risks. Nonadmitted companies can often provide more flexible terms and conditions, which can be vital for niche markets or specialized insurance needs.

Admitted companies, on the other hand, are fully licensed to transact business in the state and must adhere to specific state regulations, making them less flexible for unique risks. Mutual and stock companies refer to the ownership structure of an insurance company and do not directly relate to the placement of coverage by surplus lines producers.