100+ Free New Jersey Surplus Lines Practice Questions

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What is 'facultative reinsurance' in the surplus lines context?

A regulatory requirement

Automatic reinsurance for all risks

A type of surplus lines policy

Individual risk-by-risk reinsurance where each risk is separately negotiated and placed

to track

Same family resources

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

2026 Statistics

Key Facts: New Jersey Surplus Lines Exam

65-75%

First-Time Pass Rate

Industry Data

70%

Passing Score

PSI

Exam Questions

PSI

3.5 hours

Exam Duration

PSI

$45

Exam Fee

PSI

P&C Required

Prerequisite

NJ DOBI

New Jersey requires surplus lines brokers to pass a comprehensive PSI exam covering E&S markets, NJ-specific laws, coverages, licensing, and guaranty fund topics. The 3.5-hour exam is one of the longest surplus lines exams nationally, reflecting NJ's thorough testing of broker competency.

Sample New Jersey Surplus Lines Practice Questions

Try these sample questions to test your New Jersey 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 a surplus lines broker in New Jersey?

A.An agent who sells standard admitted insurance

B.A licensed intermediary who places coverage with non-admitted insurers when coverage is unavailable in the admitted market

C.A claims adjuster specializing in excess coverage

D.A reinsurance broker

Explanation: A surplus lines broker in New Jersey is a specially licensed intermediary authorized to place insurance with non-admitted (surplus lines) insurers when the needed coverage cannot be obtained from admitted carriers. New Jersey requires a separate surplus lines license beyond the standard P&C license.

2Which testing vendor administers the New Jersey surplus lines broker exam?

A.Prometric

B.Pearson VUE

C.PSI

D.Castle Worldwide

Explanation: PSI administers the New Jersey surplus lines broker licensing exam. Candidates must register through PSI to schedule their exam at an authorized testing center. The exam fee is approximately $45.

3What is the time limit for the New Jersey surplus lines broker exam?

A.1 hour

B.2 hours

C.3.5 hours

D.4 hours

Explanation: The New Jersey surplus lines broker exam allows 3.5 hours for completion, which is significantly longer than most other state surplus lines exams. This extended time reflects the comprehensive nature of the NJ exam, covering surplus lines law, markets, coverages, licensing, and the guaranty fund.

4How many scored questions are on the New Jersey surplus lines broker exam?

A.25

B.40

C.50

D.75

Explanation: The New Jersey surplus lines broker exam contains 50 scored questions. With a 3.5-hour time limit, candidates have ample time per question to carefully analyze each scenario and select the best answer.

5What is the passing score for the New Jersey surplus lines broker exam?

A.60%

B.65%

C.70%

D.75%

Explanation: The New Jersey surplus lines broker exam requires a minimum passing score of 70%. This means a candidate must correctly answer at least 35 of the 50 scored questions to pass.

6What is the approximate exam fee for the New Jersey surplus lines broker exam?

A.$25

B.$45

C.$64

D.$100

Explanation: The New Jersey surplus lines broker exam administered by PSI costs approximately $45. This is among the lower exam fees for state surplus lines broker exams. Additional licensing application fees apply separately.

7Which state department regulates surplus lines insurance in New Jersey?

A.New Jersey Department of Labor

B.New Jersey Department of Banking and Insurance (DOBI)

C.New Jersey Department of Commerce

D.New Jersey Attorney General's Office

Explanation: The New Jersey Department of Banking and Insurance (DOBI) regulates surplus lines insurance in the state. DOBI oversees surplus lines broker licensing, maintains the eligible insurer list, enforces compliance, and collects surplus lines taxes.

8What is the surplus lines premium tax rate in New Jersey?

A.3%

B.5%

C.5.03%

D.8%

Explanation: New Jersey imposes a 5% premium tax on surplus lines transactions. The surplus lines broker is responsible for collecting this tax from the insured and remitting it to the state. This tax compensates for the premium taxes that admitted insurers would otherwise pay.

9What is a diligent search requirement in New Jersey surplus lines?

A.A background check on the insured

B.A documented effort to obtain coverage from admitted insurers before placing with a non-admitted carrier

C.A search for the cheapest premium

D.An investigation into claims history

Explanation: New Jersey requires surplus lines brokers to conduct a diligent search, documenting their good-faith effort to obtain coverage from admitted insurers before placing with a non-admitted carrier. This protects consumers and ensures the surplus lines market is used only when the admitted market is unavailable.

10What is the New Jersey Surplus Lines Guaranty Fund?

A.A fund that guarantees all surplus lines policies

B.There is no guaranty fund protection for surplus lines policies in New Jersey — policyholders are not covered

C.A federal fund that protects all insurance policyholders

D.A fund managed by Lloyd's of London

Explanation: New Jersey surplus lines policies are NOT covered by the New Jersey Property-Liability Insurance Guaranty Association. If a non-admitted insurer becomes insolvent, policyholders have no guaranty fund protection. Surplus lines brokers must disclose this to insureds.

About the New Jersey Surplus Lines Exam

The New Jersey surplus lines broker exam is a comprehensive 3.5-hour exam covering surplus lines law, markets, coverages, licensing, and guaranty fund topics. It tests knowledge of NJ DOBI regulations, ELANJ filing requirements, diligent search obligations, and surplus lines taxation.

Questions

50 scored questions

Time Limit

3.5 hours

Passing Score

70%

Exam Fee

$45 (PSI)

New Jersey Surplus Lines Exam Content Outline

30%

Surplus Lines Markets

Lloyd's of London, London market, alien insurers, wholesale brokers, MGAs, market cycles, and E&S industry structure

25%

New Jersey Surplus Lines Law

NJ DOBI regulations, ELANJ, licensing requirements, disclosure obligations, guaranty fund exclusion, and penalties

20%

Diligent Search & Eligibility

Diligent search process, declination documentation, eligible insurer financial requirements, export lists, exempt commercial purchasers

25%

Taxation & Compliance

NJ 5% premium tax, ELANJ tax processing, NRRA home-state taxation, recordkeeping, and filing obligations

How to Pass the New Jersey Surplus Lines Exam

What You Need to Know

Passing score: 70%
Exam length: 50 questions
Time limit: 3.5 hours
Exam fee: $45

Keys to Passing

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

New Jersey Surplus Lines Study Tips from Top Performers

1Focus on all five exam topic areas: law, markets, coverages, licensing, and guaranty fund

2Know NJ's 5% surplus lines premium tax and ELANJ filing procedures

3Understand the structure of Lloyd's of London, syndicates, and the London market thoroughly

4Study the NRRA home-state taxation provisions and their impact on NJ transactions

5Master the diligent search process, documentation requirements, and eligible insurer standards

6Review NJ-specific topics like coastal property risks and environmental liability coverages

Frequently Asked Questions

What does the New Jersey surplus lines broker exam cover?

The NJ exam comprehensively covers five areas: surplus lines law, markets and operations, coverages, licensing requirements, and guaranty fund topics. It is one of the most thorough surplus lines exams nationally.

Why is the NJ surplus lines exam 3.5 hours long?

The 3.5-hour time limit reflects the comprehensive scope of the NJ exam, which covers surplus lines law, markets, coverages, licensing, and guaranty fund topics in depth. Most other states allow only 1 hour.

What is the passing score for the NJ surplus lines exam?

You need a score of 70% or higher to pass, which means correctly answering at least 35 of the 50 scored questions on the PSI-administered exam.

What is ELANJ and why is it important?

The Excess Lines Association of New Jersey (ELANJ) serves as a stamping office, reviewing surplus lines filings for compliance and assisting with tax processing. Brokers file transactions through ELANJ.

What is the surplus lines premium tax rate in New Jersey?

New Jersey imposes a 5% premium tax on surplus lines transactions. The broker collects this from the insured and remits it through ELANJ to the state.

Are surplus lines policies covered by the NJ guaranty fund?

No. Surplus lines policies are NOT protected by the NJ Property-Liability Insurance Guaranty Association. Brokers must provide written disclosure of this to insureds before placing coverage.