Missouri Surplus Lines Broker

What is a surplus lines broker in Missouri?

• AAn agent who sells standard admitted insurance
• BA licensed intermediary who places coverage with non-admitted insurers when coverage is u…
• CA claims adjuster specializing in excess coverage
• DA reinsurance broker

What prerequisite license must a Missouri surplus lines broker hold?

• ALife insurance license
• BHealth insurance license
• CActive Property & Casualty license
• DNo prerequisite required

What is the passing score for the Missouri surplus lines broker exam?

• A60%
• B65%
• C70%
• D75%

Which testing vendor administers the Missouri surplus lines broker exam?

• APrometric
• BPSI
• CPearson VUE
• DCastle Worldwide

What is a 'diligent search' in the context of Missouri surplus lines?

• AA background check on the insured
• BA documented effort to obtain coverage from admitted insurers before placing with a non-a…
• CA search for the cheapest premium available
• DAn investigation into claims history

Under Missouri law, when is an admitted market deemed unavailable for surplus lines placement?

• AAfter any single admitted insurer declines the risk
• BAfter contacting three admitted insurers regardless of appointment status
• CAfter due diligence shows coverage cannot be obtained from appointed admitted insurers an…
• DAfter the insured signs a surplus lines disclosure form

What is the Missouri Department of Commerce and Insurance (DCI) responsible for regarding surplus lines?

• ASetting premium rates for surplus lines policies
• BRegulating and overseeing surplus lines brokers and ensuring compliance with state laws
• CDirectly insuring risks that cannot be placed in the admitted market
• DProviding reinsurance to surplus lines carriers

What is the surplus lines premium tax rate in Missouri?

• A2%
• B3%
• C5%
• D8%

Who is responsible for collecting and remitting surplus lines taxes in Missouri?

• AThe insured
• BThe non-admitted insurer
• CThe surplus lines broker
• DThe Missouri DCI

What is an 'eligible surplus lines insurer' in Missouri?

• AAny insurer licensed in Missouri
• BA non-admitted insurer that meets Missouri's financial and regulatory requirements to wri…
• CAny Lloyd's syndicate
• DAny reinsurer

What is Lloyd's of London in the surplus lines market?

• AA single insurance company
• BA marketplace where multiple syndicates underwrite insurance risks
• CA government-backed insurer
• DA reinsurance treaty

What is a Lloyd's syndicate?

• AA group of policyholders
• BA group of underwriters pooling capital to accept insurance risks at Lloyd's of London
• CA type of reinsurance agreement
• DA regulatory body in the UK

What is the London Market in surplus lines insurance?

• AA stock exchange for insurance companies
• BA collective term for Lloyd's syndicates, London company market insurers, and P&I clubs o…
• CA single large insurance company based in London
• DA UK regulatory body

What is an 'alien insurer' in the context of surplus lines?

• AAn insurer from another state
• BAn insurer domiciled in a foreign country
• CAn insurer that is not licensed anywhere
• DAn insurer specializing in space risks

What is the difference between an admitted and non-admitted insurer?

• AAdmitted insurers charge higher premiums
• BAdmitted insurers are licensed by the state and backed by the state guaranty fund; non-ad…
• CNon-admitted insurers are illegal
• DThere is no difference

What protection do policyholders lose when purchasing surplus lines insurance in Missouri?

• AAll insurance protections
• BCoverage under the Missouri Property and Casualty Insurance Guaranty Association
• CThe right to file claims
• DPremium payment protections

What disclosure must a Missouri surplus lines broker provide to the insured regarding guaranty fund protection?

• ANo disclosure is required
• BA written notice that the policy is placed with a non-admitted insurer and is NOT covered…
• CA verbal acknowledgment only
• DA disclosure that the insurer is fully backed by the state

What is the Nonadmitted and Reinsurance Reform Act (NRRA)?

• AA Missouri state law governing surplus lines
• BA federal law enacted as part of the Dodd-Frank Act that streamlines surplus lines taxati…
• CA regulation governing reinsurance only
• DA Lloyd's of London regulation

Under the NRRA, which state has the sole authority to tax a surplus lines transaction?

• AThe state where the insurer is domiciled
• BThe home state of the insured
• CThe state where the risk is located
• DThe state where the broker is licensed

How does the NRRA define the 'home state' of an insured?

• AWhere the insured was born
• BThe state where the insured maintains its principal place of business or, for an individu…
• CThe state with the most insured property
• DThe state where the policy was issued

What types of risks are commonly placed in the surplus lines market?

• AStandard homeowner's insurance
• BStandard auto insurance
• CHard-to-place risks such as environmental liability, special events, vacant properties, a…
• DTerm life insurance

What is excess and surplus (E&S) lines insurance?

• AInsurance that exceeds the policy limits of a standard policy
• BInsurance provided by non-admitted carriers for risks the standard market cannot accommod…
• CExtra coverage added to an existing policy
• DInsurance for surplus inventory

In Missouri, what records must a surplus lines broker maintain for each transaction?

• AOnly the premium amount
• BOnly the insured's name
• CComplete records including the insured's name, policy details, insurer, premium, tax coll…
• DOnly the policy number

How long must a Missouri surplus lines broker retain transaction records?

• AOne year
• BThree years
• CFive years
• DIndefinitely

When must a Missouri surplus lines broker pay annual surplus lines premium taxes for the preceding calendar year?

• AJanuary 31
• BMarch 1
• CBefore April 16
• DJune 30

What happens if a surplus lines broker places coverage with an ineligible non-admitted insurer in Missouri?

• ANothing, there are no consequences
• BThe broker may face license suspension or revocation, fines, and personal liability for u…
• CThe policy is automatically converted to an admitted policy
• DThe insured loses all coverage

What financial requirements must a non-admitted insurer meet to be eligible in Missouri?

• ANo financial requirements exist
• BMinimum capital and surplus requirements, typically at least $15 million in policyholder…
• COnly a valid business license
• DThe same requirements as admitted insurers

What role does the Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT) play?

• AIt replaces state surplus lines laws
• BIt is an interstate compact designed to create a streamlined regulatory framework for mul…
• CIt eliminates surplus lines taxes
• DIt licenses surplus lines brokers nationally

A Missouri surplus lines broker fails to conduct a proper diligent search. What is the consequence?

• ANo consequence if the insured is satisfied
• BThe broker may face disciplinary action including fines and license suspension or revocat…
• CThe policy is automatically voided
• DThe insured receives a premium refund from the state

What is a 'declination' in the surplus lines diligent search process?

• AA policy cancellation
• BA formal refusal by an admitted insurer to provide the requested coverage
• CA premium reduction
• DA claim denial

Under Missouri law, can a surplus lines broker charge a fee in addition to the premium?

• ANo, broker fees are prohibited
• BYes, but the fee must be disclosed to the insured and documented
• CYes, with no disclosure required
• DOnly if the fee is less than 10% of the premium

What is the primary purpose of surplus lines insurance?

• ATo undercut admitted market pricing
• BTo provide coverage for risks that the admitted insurance market cannot or will not insure
• CTo replace the admitted market entirely
• DTo provide government-backed insurance

What is an 'export list' or 'exempt commercial purchaser' provision?

• AA list of insurance products that cannot be sold in Missouri
• BA provision that allows certain types of commercial risks to be placed in the surplus lin…
• CA list of banned insurers
• DA tax exemption for surplus lines

Who qualifies as an 'exempt commercial purchaser' under the NRRA?

• AAny business with insurance
• BA commercial insured that meets specific financial thresholds, such as net worth exceedin…
• CAny Fortune 500 company
• DOnly government entities

What is 'industrial insured' status and how does it affect surplus lines placement?

• AIt has no effect on surplus lines
• BIndustrial insureds are large commercial entities that can directly access the surplus li…
• CIt means the insured works in manufacturing
• DIt allows individuals to bypass surplus lines requirements

What is the role of a managing general agent (MGA) in the surplus lines market?

• AThey replace surplus lines brokers
• BAn MGA is authorized by an insurer to underwrite and bind coverage, often specializing in…
• CThey only handle claims
• DThey set state regulations

What is a surplus lines 'stamping office'?

• AA post office for insurance documents
• BAn organization that reviews and stamps surplus lines filings to verify compliance with s…
• CA government licensing bureau
• DA premium collection agency

What type of coverage would most likely need to be placed in the surplus lines market?

• AStandard personal auto insurance
• BEnvironmental pollution liability for a chemical manufacturer
• CBasic homeowner's insurance
• DTerm life insurance

Which of the following is an advantage of surplus lines insurance over admitted insurance?

• AState guaranty fund protection
• BGreater flexibility in policy forms, rates, and coverage terms
• CLower premiums in all cases
• DAutomatic coverage for all perils

What is the primary disadvantage of surplus lines insurance for the policyholder?

• ACoverage is always more expensive
• BNo protection from the state guaranty fund if the insurer becomes insolvent
• CPolicies cannot be renewed
• DClaims cannot be filed

In Missouri, can surplus lines insurance be placed for a risk that IS available in the admitted market?

• AYes, any risk can be placed in the surplus lines market
• BNo, surplus lines placement is only permitted when admitted market coverage is unavailabl…
• CYes, if the surplus lines premium is lower
• DYes, if the insured requests it

What is a 'binder' in surplus lines insurance?

• AA permanent policy document
• BA temporary agreement providing coverage until the formal policy is issued
• CA claims settlement agreement
• DA tax document

What is a 'manuscript policy' in the surplus lines market?

• AA standard ISO form
• BA custom-drafted policy tailored to the specific needs of the insured
• CA policy written by hand
• DA policy template from Lloyd's

How does a surplus lines insurer differ from a standard market insurer in terms of rate regulation?

• ASurplus lines rates are strictly regulated by the state
• BSurplus lines insurers are generally exempt from state rate filing requirements and can s…
• CSurplus lines insurers must charge the same rates as admitted carriers
• DSurplus lines rates are set by the federal government

What is the 'Surplus Lines Insurance Multistate Compliance Compact' (SLIMPACT)?

• AA federal law replacing state surplus lines regulation
• BAn interstate compact allowing member states to share premium tax revenue from multi-stat…
• CA compact that eliminates surplus lines licensing
• DA treaty between the US and UK regarding Lloyd's

What is a 'wholesale broker' in the surplus lines distribution chain?

• AA broker who sells directly to consumers
• BAn intermediary between retail agents/brokers and surplus lines insurers, possessing spec…
• CA broker who only handles large accounts
• DA broker who works exclusively for one insurer

What document must be attached to a surplus lines policy in Missouri to notify the insured of the non-admitted status?

• AA certificate of insurance
• BA surplus lines disclosure notice or stamp indicating the policy is placed with a non-adm…
• CAn admitted carrier endorsement
• DA state guaranty fund certificate