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Question 1

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Which statement best describes a non-admitted (surplus lines) insurer in a given U.S. state?

An insurer that has filed its rates and forms with the state's insurance department and participates in that state's guaranty fund

An insurer that is not licensed in that state but is permitted to write coverage there through a licensed surplus lines broker

An insurer that has been sanctioned or penalized by the state insurance department

An insurer that writes only reinsurance and cannot issue primary policies

to track

2026 Statistics

Key Facts: ASLI Exam

Courses Required

2 ASLI core + 1 elective + Ethics

Questions Per Exam

The Institutes

65 min

Time Limit

Per course exam

70%

Passing Score

Per course exam

$259-$339

Exam Fee

2026 virtual exam fee schedule

6-9 mo

Typical Completion

ASLI designation page

ASLI is NOT a state surplus lines broker license. It is a four-course professional designation from The Institutes with a separate 50-question, 65-minute virtual exam per course and a 70% passing standard. The designation focuses on non-admitted market operations: diligent search, NRRA home state rule, eligible surplus lines insurer standards, wholesale distribution through MGAs and MGUs, Lloyd's of London, stamping offices, and specialty coverage for hard-to-place risks.

Sample ASLI Practice Questions

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1Which statement best describes a non-admitted (surplus lines) insurer in a given U.S. state?

A.An insurer that has filed its rates and forms with the state's insurance department and participates in that state's guaranty fund

B.An insurer that is not licensed in that state but is permitted to write coverage there through a licensed surplus lines broker

C.An insurer that has been sanctioned or penalized by the state insurance department

D.An insurer that writes only reinsurance and cannot issue primary policies

Explanation: A non-admitted insurer (also called a surplus lines or excess and surplus insurer in that state) is not licensed to do business in the state on an admitted basis. It may still write eligible risks in that state through a licensed surplus lines broker, subject to eligibility standards and filing requirements.

2What is the primary purpose of the surplus lines market?

A.To provide low-cost coverage for standard homeowners and auto risks

B.To cover risks that admitted insurers will not write or cannot price adequately

C.To replace state guaranty funds for insolvent insurers

D.To regulate reinsurance transactions between U.S. insurers

Explanation: The surplus lines (E&S) market exists to provide capacity for hard-to-place, unusual, high-hazard, or emerging risks that the admitted market will not write or cannot price adequately. It is often called the 'safety valve' of the insurance marketplace.

3Which federal law established that only the insured's home state may regulate and tax a multistate surplus lines placement?

A.The McCarran-Ferguson Act of 1945

B.The Gramm-Leach-Bliley Act of 1999

C.The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA)

D.The Terrorism Risk Insurance Act of 2002 (TRIA)

Explanation: The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), enacted as Subtitle B of Title V of the Dodd-Frank Act, provides that only the insured's home state may regulate and tax a surplus lines placement. Before NRRA, brokers had to allocate premium and pay tax to every state where a risk was located.

4Under the NRRA, how is a corporate insured's 'home state' generally defined?

A.The state of incorporation

B.The state where the insured's principal place of business is located

C.The state where the largest portion of the risk is located

D.The state where the surplus lines broker is licensed

Explanation: For a commercial (non-individual) insured, the NRRA defines 'home state' as the state where the insured maintains its principal place of business. If 100% of the insured risk is located out-of-state, the home state is defined as the state to which the greatest percentage of the insured's taxable premium is allocated.

5A manufacturer headquartered in Ohio has property at facilities in Ohio, Indiana, and Kentucky and places its multistate property program with a non-admitted insurer. Under NRRA, which state receives 100% of the surplus lines premium tax?

A.Ohio, Indiana, and Kentucky each receive a pro-rata share of the tax

B.Ohio only, because it is the insured's home state

C.The state where the surplus lines broker is licensed

D.The state where the non-admitted insurer is domiciled

Explanation: NRRA provides that only the insured's home state may require premium tax on a multistate surplus lines placement. Because Ohio is the manufacturer's principal place of business (home state), Ohio receives 100% of the premium tax at Ohio's rate, even though physical property is in multiple states.

6What is 'diligent search' (also called diligent effort) in surplus lines practice?

A.A state examination of the financial condition of a non-admitted insurer

B.The documented process of showing that a required number of admitted carriers first declined to write the risk before it was exported to the surplus lines market

C.A background check run on a retail producer applying for a surplus lines broker license

D.The underwriting investigation a non-admitted insurer performs before binding coverage

Explanation: Diligent search is the regulatory requirement to document that the risk was offered to and declined by a statutorily required number of admitted insurers before being placed with a non-admitted insurer. It is typically evidenced through declination letters or a diligent search / diligent effort affidavit.

7In most U.S. states, how many admitted-carrier declinations are typically required to satisfy the diligent search requirement for a non-exempt risk?

A.One declination

B.Two declinations

C.Three declinations

D.Five declinations

Explanation: Most state surplus lines laws require evidence of three declinations from admitted carriers writing the class of business before a risk can be exported to the non-admitted market. A few states use different counts, and many states waive the requirement for classes that appear on an export list or for exempt commercial purchasers under NRRA.

8What is an 'export list' (sometimes called a list of exportable classes) in surplus lines regulation?

A.A list of non-admitted insurers that are eligible to write business in a state

B.A state-maintained list of coverage classes that may be placed in the surplus lines market without conducting the normal diligent search

C.A list of states to which a surplus lines broker may export premium tax revenue

D.A list of countries whose insurers may participate in the U.S. surplus lines market

Explanation: An export list (also called an exportable list or industrial insureds list) identifies classes of coverage that a state recognizes as difficult or impossible to place in the admitted market. Risks on the list can be exported to the non-admitted market without the standard diligent search because the admitted market is known to be unwilling or unable to write them.

9A retail agent conducts diligent search but cannot obtain three declinations in writing because admitted carriers will not respond. What is the most appropriate next step?

A.Export the risk anyway and skip documentation because the admitted market is unresponsive

B.Document the diligent effort in a diligent search affidavit that captures each carrier contacted, the date, and the reason no coverage was offered

C.Place the risk with an admitted carrier even if coverage is inadequate

D.Pay the surplus lines tax to every state where the risk is located

Explanation: When written declinations cannot be obtained, most states accept a diligent search / diligent effort affidavit signed by the producer or surplus lines broker that documents each admitted carrier contacted, the date, the person contacted, and the reason coverage was not offered. The affidavit preserves a defensible record for the state.

10Under NRRA, which of the following 'exempt commercial purchasers' (ECPs) is exempt from diligent search requirements?

A.Any commercial insured with at least five employees

B.A commercial insured that meets specific criteria — including use of a qualified risk manager and a premium or asset threshold — and affirmatively requests placement in the non-admitted market

C.Any nonprofit organization regardless of size

D.Any insured located in a designated disaster area

Explanation: NRRA creates an Exempt Commercial Purchaser (ECP) category. A commercial insured qualifying as an ECP — by using a qualified risk manager and meeting specified premium, net worth, revenue, or employee thresholds — may waive the standard diligent search if the insured affirmatively requests placement in the non-admitted market.

About the ASLI Exam

The Associate in Surplus Lines Insurance (ASLI) is The Institutes' professional designation for the non-admitted (Excess & Surplus) market. The official path requires ASLI 320 Understanding Surplus Lines Operations, ASLI 321 Managing Risks with Surplus Lines Coverage, one approved elective (AIC 300, ARM 400, or AU 60), and the free Ethical Decision Making in Risk and Insurance course. The program is developed in partnership with the Derek Hughes/NAPSLO Educational Foundation, supported by the Wholesale & Specialty Insurance Association (WSIA).

Assessment

2 core ASLI courses + 1 elective + Ethics; each course uses a separate 50-question virtual exam in an Institutes testing window

Time Limit

65 minutes per course exam

Passing Score

70% per course exam

Exam Fee

$259 early registration / $339 standard per exam (The Institutes (in partnership with the Derek Hughes/NAPSLO Educational Foundation and WSIA))

ASLI Exam Content Outline

50%

ASLI 320: Understanding Surplus Lines Operations

Surplus lines market role, NRRA home state rule, diligent search and declination requirements, eligible surplus lines insurer standards, stamping offices and premium tax, wholesale distribution systems, MGA/MGU binding authority, Lloyd's of London, financial statement analysis, claims operations, and reinsurance.

50%

ASLI 321: Managing Risks with Surplus Lines Coverage

Specialty property and liability coverages written in the non-admitted market: habitational and vacant property, coastal wind and flood, environmental and pollution, cyber, marine, aviation, professional liability, D&O, management liability, commercial umbrella/excess, program business, and personal lines E&S.

How to Pass the ASLI Exam

What You Need to Know

Passing score: 70% per course exam
Assessment: 2 core ASLI courses + 1 elective + Ethics; each course uses a separate 50-question virtual exam in an Institutes testing window
Time limit: 65 minutes per course exam
Exam fee: $259 early registration / $339 standard per exam

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

ASLI Study Tips from Top Performers

1Learn the non-admitted vs admitted distinction cold. Admitted carriers file rates and forms with the state and pay into guaranty funds; non-admitted (surplus lines) insurers do not. This difference drives every other surplus lines rule, from diligent search to disclosure to premium tax.

2Memorize the NRRA home state rule. After Dodd-Frank's NRRA (2010), 100% of surplus lines premium tax goes to the insured's home state. Know how 'home state' is defined — principal place of business for commercial insureds, primary residence for individuals.

3Master the diligent search / declination process. Most states require three admitted-carrier declinations before a risk can be exported, unless the class is on the state's export list or the insured is an exempt commercial purchaser (ECP).

4Know the wholesale distribution chain. Retail agent → wholesale broker (surplus lines broker) → MGA/MGU or syndicate. Understand who has binding authority, who collects premium, who pays tax, and who files the affidavit.

5Study Lloyd's of London structure: syndicates, Lloyd's brokers, managing agents, members (Names and corporate), and the Central Fund. Lloyd's is the single largest source of surplus lines capacity in the U.S.

6Understand stamping offices (CA, FL, TX, IL, NY, and others). They review, stamp, and collect data on surplus lines filings and are a frequent ASLI 320 testing point.

Frequently Asked Questions

Is the ASLI exam the same as a state surplus lines broker license?

No. ASLI is a professional designation from The Institutes — it does not license you to place business. State surplus lines broker licensing is handled separately by each state's department of insurance (often after you already hold a property-casualty producer license). ASLI validates deep knowledge of the non-admitted market, which helps wholesalers, retail agents who export business, underwriters at E&S carriers, and claims professionals perform at a higher level, but it is not a legal credential to transact.

What courses are required for the ASLI designation?

Two ASLI core courses — ASLI 320 Understanding Surplus Lines Operations and ASLI 321 Managing Risks with Surplus Lines Coverage — plus one approved elective (AIC 300, ARM 400, or AU 60) and the free Ethical Decision Making in Risk and Insurance course. Each of the three graded courses uses its own timed virtual exam.

What is the ASLI exam format?

Each ASLI course exam uses 50 multiple-choice questions in a 65-minute virtual session with a 70% passing score. Exams are delivered in four testing windows each year (January-March, April-June, July-September, October-December) and can be taken from home or office with remote proctoring.

What is the NRRA home state rule and why does it matter?

The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) — part of the Dodd-Frank Act — established that only the insured's home state can regulate and tax a surplus lines placement when the risk is multistate. Before NRRA, brokers had to allocate premium and pay tax to every state where a risk was located. After NRRA, 100% of the premium tax goes to the home state at the home state's rate. NRRA is tested heavily on ASLI 320.

What is diligent search and why is it required?

Diligent search (also called diligent effort) is the requirement that a retail producer or surplus lines broker document that the risk was first offered to and declined by a statutorily required number of admitted carriers before it can be exported to the non-admitted market. Most states require three declinations from admitted carriers, documented via declination letters or an affidavit, unless the class is on a state export list (pre-approved as exportable).

How long does the ASLI designation usually take?

The Institutes indicates 6-9 months for most candidates, with each ASLI course typically taking 6-8 weeks of study. Candidates who pace one course at a time often take longer, especially if they add review time between testing windows.

Were there any ASLI-specific 2026 changes?

As of April 2026, The Institutes had not published an ASLI-specific blueprint, time-limit, or passing-score change. Current industry developments that appear in practice content include continued post-NRRA coordination through the Surplus Lines Clearinghouse, growth in cyber and coastal property E&S capacity, and increased wholesale concentration.