100+ Free Indiana Surplus Lines Practice Questions

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How does surplus lines insurance differ from standard market insurance regarding policy forms?

Surplus lines policies cannot include any exclusions

Surplus lines policies must use the same ISO forms as admitted carriers

There is no difference in policy forms between the two markets

Surplus lines insurers can use non-standard or manuscript policy forms without state approval

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

2026 Statistics

Key Facts: Indiana Surplus Lines Exam

65-75%

First-Time Pass Rate

Industry Data

70%

Passing Score

Indiana DOI

~50

Exam Questions

Plus pretest items

1 hour

Exam Duration

Pearson VUE

$55

Exam Fee

Pearson VUE

P&C Required

Prerequisite

Indiana DOI

Indiana requires surplus lines brokers to pass a Pearson VUE exam covering E&S markets, state-specific surplus lines law, diligent search requirements, and tax compliance. You need an active IN P&C license, and the resident license fee is $80 (nonresident $120).

Sample Indiana Surplus Lines Practice Questions

Try these sample questions to test your Indiana 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?

A.To provide coverage for risks that cannot be placed in the admitted market

B.To offer lower premiums than admitted insurers

C.To replace the standard insurance market for all commercial risks

D.To provide reinsurance for admitted carriers

Explanation: The surplus lines market exists to provide coverage for risks that the admitted (standard) market is unable or unwilling to insure. These are typically unique, high-hazard, or hard-to-place risks. Surplus lines insurers are not necessarily cheaper — they fill gaps where admitted carriers decline coverage.

2In Indiana, who must hold a surplus lines broker license?

A.Any agent who places insurance with a non-admitted insurer on behalf of an insured

B.Only managing general agents who deal with Lloyd's of London

C.All Property & Casualty producers regardless of the market they use

D.Only insurers that are not admitted in Indiana

Explanation: In Indiana, any person who places, negotiates, or procures insurance with a non-admitted (surplus lines) insurer on behalf of an insured must hold a surplus lines broker license. This is separate from and in addition to a standard P&C producer license.

3What is Lloyd's of London?

A.An insurance marketplace where syndicates underwrite risks

B.A single insurance company based in London

C.A regulatory body that oversees surplus lines globally

D.A reinsurance company that backs all surplus lines policies

Explanation: Lloyd's of London is not an insurance company but rather a marketplace where individual syndicates (groups of underwriters) come together to underwrite and share risks. Each syndicate operates independently, managed by a managing agent, and assumes its own portion of risk on each policy.

4What prerequisite must a candidate meet before taking the Indiana surplus lines broker exam?

A.Hold an active Indiana Property & Casualty producer license

B.Complete a 40-hour surplus lines pre-licensing course

C.Have at least 3 years of insurance industry experience

D.Obtain a letter of recommendation from an admitted insurer

Explanation: Indiana requires that surplus lines broker exam candidates hold an active Indiana Property & Casualty producer license. This ensures candidates already understand fundamental insurance concepts before specializing in the surplus lines market.

5What is a 'diligent search' in the context of surplus lines insurance?

A.A documented effort to place coverage with admitted insurers before using a surplus lines carrier

B.A background check performed on the surplus lines insurer

C.A financial audit of the non-admitted insurer's reserves

D.An investigation into the insured's claims history

Explanation: A diligent search is the process by which a surplus lines broker documents their attempt to place coverage with admitted (licensed) insurers before turning to the surplus lines market. This ensures the surplus lines market is only used when the admitted market cannot accommodate the risk.

6What is the passing score for the Indiana surplus lines broker exam?

A.70%

B.65%

C.75%

D.77%

Explanation: The Indiana surplus lines broker exam requires a passing score of 70%. This is the standard passing threshold used by most states for surplus lines exams. Some states like Michigan require a higher 77% score.

7What is an 'alien insurer' in surplus lines terminology?

A.An insurer domiciled outside the United States

B.An insurer operating without any license in any state

C.A foreign insurer domiciled in another U.S. state

D.An insurer that only writes reinsurance

Explanation: An alien insurer is one domiciled outside the United States, such as Lloyd's of London syndicates or European insurers. This is distinct from a 'foreign' insurer, which is domiciled in another U.S. state. Both may operate as surplus lines carriers, but alien insurers face additional eligibility requirements.

8What is the Nonadmitted and Reinsurance Reform Act (NRRA)?

A.Federal legislation that streamlined surplus lines taxation by establishing the home state rule

B.A state law that requires surplus lines brokers to register with the NAIC

C.An international treaty governing Lloyd's of London operations in the U.S.

D.A regulation that prohibits surplus lines insurers from writing certain coverage types

Explanation: The NRRA, enacted as part of the Dodd-Frank Act in 2010, established that the insured's home state has sole regulatory authority over surplus lines taxation. This eliminated the complex multi-state tax allocation that previously existed when risks were spread across multiple states.

9What fee does an Indiana resident pay for a surplus lines broker license?

A.$80

B.$55

C.$120

D.$100

Explanation: Indiana charges a resident fee of $80 for a surplus lines broker license. The nonresident license fee is $120. The exam fee of $55 is separate and paid to Pearson VUE. These costs are in addition to maintaining the underlying P&C producer license.

10How does the NRRA's 'home state' rule affect surplus lines taxation in Indiana?

A.Indiana collects surplus lines tax only when the insured's home state is Indiana

B.Indiana collects tax on all surplus lines policies covering risks physically located in Indiana

C.Indiana splits the surplus lines tax with every state where the risk is located

D.Indiana does not collect any surplus lines tax under the NRRA

Explanation: Under the NRRA home state rule, only the insured's home state has the authority to tax surplus lines premiums. If the insured is domiciled in Indiana, Indiana collects the full surplus lines premium tax regardless of where the insured risk is physically located. This simplified the previously complex multi-state tax allocation process.

About the Indiana Surplus Lines Exam

The Indiana Surplus Lines Broker exam tests your knowledge of surplus lines markets, Indiana surplus lines law, diligent search requirements, premium taxation, and compliance obligations. Candidates must hold an active Indiana P&C producer license. The exam consists of approximately 50 scored questions plus pretest items, with a 1-hour time limit and 70% passing score.

Questions

50 scored questions

Time Limit

1 hour

Passing Score

70%

Exam Fee

$55 (Pearson VUE)

Indiana Surplus Lines Exam Content Outline

30%

Surplus Lines Markets

Lloyd's of London, London market syndicates, alien insurers, domestic surplus lines carriers, market access, and placement procedures

25%

Indiana Surplus Lines Law

Indiana Insurance Code surplus lines provisions, Department of Insurance regulations, licensing requirements, resident and nonresident broker obligations

20%

Diligent Search & Eligibility

Indiana diligent search documentation, declination requirements, eligible surplus lines insurer qualifications, and non-admitted insurer standards

25%

Taxation & Compliance

Indiana surplus lines premium tax rates, stamping fees, reporting deadlines, record-keeping requirements, and penalties for violations

How to Pass the Indiana Surplus Lines Exam

What You Need to Know

Passing score: 70%
Exam length: 50 questions
Time limit: 1 hour
Exam fee: $55

Keys to Passing

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

Indiana Surplus Lines Study Tips from Top Performers

1Focus on Indiana-specific surplus lines statutes and Department of Insurance regulations — about 30% of questions test state law

2Master the diligent search process including documentation requirements and how many declinations Indiana requires

3Learn the structure of Lloyd's of London including syndicates, managing agents, and how Lloyd's policies differ from standard market policies

4Understand Indiana surplus lines premium tax rates, filing deadlines, and stamping fee requirements

5Study the NRRA and how it changed multi-state surplus lines taxation with the home state rule

6Review the differences between admitted, non-admitted, and eligible surplus lines insurers in Indiana

Frequently Asked Questions

What are the requirements to take the Indiana surplus lines broker exam?

You must hold an active Indiana Property & Casualty producer license before applying for the surplus lines broker exam. The exam is administered by Pearson VUE and costs $55. After passing, the resident license fee is $80 and the nonresident license fee is $120.

How many questions are on the Indiana surplus lines exam?

The Indiana surplus lines exam has approximately 50 scored questions plus additional pretest questions that do not count toward your score. You have 1 hour to complete the exam, and you need a score of 70% or higher to pass.

What topics does the Indiana surplus lines exam cover?

The exam covers four main areas: surplus lines markets and operations (Lloyd's, alien insurers), Indiana surplus lines law and regulations, diligent search requirements and insurer eligibility, and surplus lines taxation and compliance including premium tax and reporting obligations.

What is a diligent search in Indiana surplus lines?

A diligent search is the documented process of attempting to place coverage with admitted (licensed) insurers before placing it with a surplus lines carrier. Indiana requires brokers to demonstrate that the coverage was declined by the admitted market before using a non-admitted insurer.

How does the NRRA affect Indiana surplus lines?

The Nonadmitted and Reinsurance Reform Act (NRRA) established that only the insured's home state can regulate surplus lines taxation. For Indiana, this means the state collects surplus lines premium tax on policies where the insured's home state is Indiana, regardless of where the risk is located.

How long should I study for the Indiana surplus lines exam?

Most candidates study 20-40 hours over 2-4 weeks. Focus on Indiana-specific surplus lines statutes, diligent search procedures, premium tax requirements, and the structure of surplus lines markets including Lloyd's of London and alien insurers.