100+ Free Hawaii Surplus Lines Practice Questions

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What happens when a Hawaii surplus lines insurer becomes insolvent?

Policyholders must file claims in the insurer's insolvency proceeding with potential partial or no recovery

The federal government guarantees all claims

The broker pays all claims

The Hawaii guaranty fund pays all claims

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Free Surplus Lines Insurance Practice Test by State 2026: 2,300+ Questions22 min read

2026 Statistics

Key Facts: Hawaii Surplus Lines Exam

65-75%

First-Time Pass Rate

Industry Data

70%

Passing Score

Hawaii DCCA Insurance Division

~50

Exam Questions

Pearson VUE

~1 hour

Exam Duration

Pearson VUE

$75

Exam Fee

Pearson VUE

P&C Exam Required

Prerequisite

HRS 431:8-324

The HI surplus lines broker exam has approximately 50 questions (scored plus pretest) with about 1 hour and a 70% passing score. Candidates must pass the P&C exam first per HRS 431:8-324. Hawaii imposes a unique 4.68% surplus lines premium tax and has distinctive risk exposures including volcanic activity and hurricane risk.

Sample Hawaii Surplus Lines Practice Questions

Try these sample questions to test your Hawaii Surplus Lines exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the primary purpose of the surplus lines market in Hawaii?

A.To provide coverage for risks that admitted carriers cannot or will not insure

B.To offer cheaper insurance than Hawaii's admitted carriers

C.To replace the Hawaii Insurance Guaranty Association

D.To provide coverage exclusively for tourism-related risks

Explanation: The surplus lines market in Hawaii exists to provide coverage for risks that admitted carriers are unable or unwilling to insure. This is particularly relevant in Hawaii given the state's unique exposures including volcanic activity, tsunami risk, hurricane exposure, and specialized tourism and marine risks that standard carriers may not adequately cover.

2What prerequisite must a Hawaii surplus lines broker candidate meet before obtaining a surplus lines license?

A.Hold a life insurance license

B.Pass the property and casualty (P&C) exam first

C.Complete a college degree in insurance

D.Work as a claims adjuster for 5 years

Explanation: In Hawaii, a surplus lines broker candidate must pass the property and casualty (P&C) exam first, as required by HRS 431:8-324. This prerequisite ensures that surplus lines brokers have foundational knowledge of insurance principles and the P&C market before entering the more specialized surplus lines field.

3Which Hawaii statute governs surplus lines insurance?

A.HRS 431:6

B.HRS 431:8-324

C.HRS 431:10

D.HRS 431:14

Explanation: Hawaii Revised Statutes (HRS) 431:8-324 is a key provision governing surplus lines insurance in Hawaii. This section addresses surplus lines broker licensing requirements, diligent search obligations, eligible insurer standards, and other regulatory requirements for surplus lines placements in the state.

4What must a Hawaii surplus lines broker do before placing coverage with a non-admitted insurer?

A.Obtain written approval from the Hawaii Insurance Commissioner

B.Conduct a diligent search of the admitted market

C.File the policy form with the state for approval

D.Advertise the risk in a Hawaii newspaper

Explanation: Hawaii law requires surplus lines brokers to conduct a diligent search of the admitted market before placing coverage with a non-admitted insurer. This ensures that the surplus lines market is used appropriately — only when the standard admitted market cannot provide the needed coverage for the risk.

5What is the Hawaii surplus lines premium tax rate?

A.2.5%

B.4%

C.4.68%

D.5%

Explanation: Hawaii imposes a surplus lines premium tax of 4.68% on surplus lines transactions. The surplus lines broker is responsible for collecting this tax from the insured and remitting it to the Hawaii Department of Commerce and Consumer Affairs, Insurance Division. This rate is specific to Hawaii and brokers must ensure accurate calculation.

6Which state agency regulates surplus lines insurance in Hawaii?

A.Hawaii Department of Land and Natural Resources

B.Hawaii Department of Commerce and Consumer Affairs, Insurance Division

C.Hawaii Department of Business, Economic Development and Tourism

D.Hawaii Office of the Governor

Explanation: The Hawaii Department of Commerce and Consumer Affairs (DCCA), Insurance Division regulates surplus lines insurance in the state. This division oversees surplus lines broker licensing, maintains the eligible insurer list, enforces compliance, and takes disciplinary action for violations of Hawaii surplus lines law.

7What is Lloyd's of London?

A.A single insurance company headquartered in London

B.A marketplace where syndicates of underwriters accept risk

C.A British government insurance program

D.A reinsurance brokerage

Explanation: Lloyd's of London is a marketplace where individual syndicates of underwriters pool and spread risk. It is not a single insurance company. Lloyd's syndicates are major participants in the surplus lines market, providing capacity for complex and specialty risks worldwide, including in Hawaii's unique risk environment.

8Are policyholders of surplus lines insurers in Hawaii protected by the Hawaii Insurance Guaranty Association?

A.Yes, all policyholders are covered

B.No, surplus lines policies are excluded from guaranty fund protection

C.Only for claims under $100,000

D.Only if the insurer is domiciled in Hawaii

Explanation: Policyholders of surplus lines (non-admitted) insurers in Hawaii are not protected by the Hawaii Insurance Guaranty Association. If a surplus lines insurer becomes insolvent, the policyholder must pursue claims through the insurer's insolvency proceeding. This key risk must be disclosed to the insured at the time of placement.

9What is the Nonadmitted and Reinsurance Reform Act (NRRA)?

A.A Hawaii-specific statute

B.A federal law giving the home state of the insured sole surplus lines regulatory authority

C.An NAIC model regulation

D.A Lloyd's of London governing document

Explanation: The NRRA, enacted as part of the Dodd-Frank Act in 2010, is a federal law establishing that only the home state of the insured has regulatory authority over surplus lines transactions, including the sole right to tax. This simplified the complex multi-state regulation and taxation that previously existed for surplus lines placements.

10What is the exam fee for the Hawaii surplus lines broker exam?

A.$44

B.$64

C.$75

D.$100

Explanation: The Hawaii surplus lines broker exam fee is approximately $75, payable to Pearson VUE when scheduling the exam. This is the exam administration fee and is separate from any license application fees. The exam is administered at Pearson VUE testing centers.

About the Hawaii Surplus Lines Exam

The Hawaii Surplus Lines Broker exam tests knowledge of surplus lines markets, HI-specific surplus lines law under HRS 431:8-324, diligent search requirements, eligible insurer standards, the 4.68% premium tax, NRRA provisions, and compliance obligations for brokers placing insurance with non-admitted carriers in Hawaii.

Questions

50 scored questions

Time Limit

~1 hour

Passing Score

70%

Exam Fee

$75 (Pearson VUE / Hawaii DCCA Insurance Division)

Hawaii Surplus Lines Exam Content Outline

30%

Surplus Lines Markets

Lloyd's of London, London market, alien insurers, E&S carrier operations, managing general agents, wholesale distribution, market cycles, and Hawaii's unique market

25%

Hawaii Surplus Lines Law

HRS 431:8-324 provisions, DCCA Insurance Division authority, licensing requirements, P&C exam prerequisite, broker obligations, and enforcement

20%

Diligent Search & Eligibility

Diligent search requirements, documentation, declinations, eligible insurer lists, NAIC IID Quarterly Listing, financial requirements, and export list

25%

Taxation & Compliance

4.68% premium tax calculation, NRRA home state taxation, record-keeping, annual filings, disclosure requirements, and guaranty fund exclusion

How to Pass the Hawaii Surplus Lines Exam

What You Need to Know

Passing score: 70%
Exam length: 50 questions
Time limit: ~1 hour
Exam fee: $75

Keys to Passing

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

Hawaii Surplus Lines Study Tips from Top Performers

1Master Hawaii's unique 4.68% surplus lines premium tax rate and practice calculating tax on various premium amounts

2Understand HRS 431:8-324 and the P&C exam prerequisite requirement

3Study Hawaii's unique risk exposures: volcanic hazards, hurricanes, tsunamis, and their impact on surplus lines

4Know the NRRA's home state provisions and how they affect multi-state surplus lines taxation

5Learn the disclosure requirements — insureds must be told the insurer is non-admitted and not covered by the guaranty fund

6Review the diligent search documentation requirements and how Hawaii's geographic isolation affects placement

Frequently Asked Questions

What are the prerequisites for the Hawaii surplus lines broker exam?

You must pass the property and casualty (P&C) exam first, as required by HRS 431:8-324. You must then pass the surplus lines broker exam with 70% or higher. The exam fee is approximately $75 and is administered by Pearson VUE.

What is the Hawaii surplus lines premium tax rate?

Hawaii imposes a 4.68% surplus lines premium tax on gross premiums. This rate is unique to Hawaii. The surplus lines broker is responsible for collecting this tax from the insured and remitting it to the Hawaii DCCA Insurance Division.

What unique risks in Hawaii drive surplus lines demand?

Hawaii has unique natural hazards including volcanic activity (lava flows, ash, vog), tsunami risk, hurricane exposure, and earthquake risk. The state's tourism-dependent economy, geographic isolation, and high coastal property values also create demand for specialty surplus lines coverage.

Are surplus lines policyholders protected by Hawaii's guaranty fund?

No. Policyholders of surplus lines (non-admitted) insurers are excluded from the Hawaii Insurance Guaranty Association. If a surplus lines insurer becomes insolvent, the policyholder has no safety net. This must be disclosed to the insured at placement.

How many questions are on the Hawaii surplus lines broker exam?

The HI surplus lines exam has approximately 50 questions including scored and pretest (unscored) questions. You have about 1 hour to complete the exam and need 70% on the scored questions to pass. It is administered by Pearson VUE.

What statute governs surplus lines in Hawaii?

Hawaii surplus lines insurance is primarily governed by HRS 431:8-324 (Hawaii Revised Statutes). This statute covers broker licensing, diligent search requirements, eligible insurer standards, premium tax obligations, and compliance requirements overseen by the DCCA Insurance Division.