280 Recent Questions and Answers for the
Michigan Surplus Lines Exam 2025-2026 Prep/
Michigan Surplus Lines Insurance Test Prep
(1)In Michigan, a surplus lines producer must report surplus lines or non admitted
insurance business written for a Michigan risk on what basis?
A) Monthly
B) Quarterly
C) Semi-Annually
D) Annually - ANSWER-C) Semi-Annually
(2) Which of these imposes a set of national eligibility standards for surplus lines
insurers domiciled in any US jurisdiction?
A) NRCA
B) NRTT
C) NRAS
D) NRRA - ANSWER-D) NRRA (National Risk Retention Association)
(3) 100% of surplus lines tax is payable to Michigan if Michigan is the home state
of:
A) The insurer
B) The insured - ANSWER-B) The insured
(4) In Michigan, a transaction that takes place in April needs to be reported by:
A) August 15th
B) September 15th
pg. 1
,C) October 15th
D) November 15th - ANSWER-A) August 15th
(5) A surplus lines insurer:
A) Has to be licensed and admitted in the same state as the broker
B) Is not always licensed or admitted in the same state as the broker - ANSWER-
B) Is not always licensed or admitted in the same state as the broker
(6) Karl the fortune teller believes that the world is full of uncertainty, and so is his
destiny. He often engages himself in extreme sports activities for fun and for
challenge. He thinks he will need more insurance coverage in the future. He prefers
a surplus line policy.
A) This is a good idea
B) This is probably not a good idea - ANSWER-B) This is probably not a good
idea
Surplus lines is for hard to place risk. nothing about this is really hard to place, and
he should maybe just buy more life insurance.
(7) A domestic surplus lines company must be licensed in at least one state or other
US jurisdiction.
True or False - ANSWER-True
(8) When a surplus lines insurance for coverage in this state is not placed through a
licensed surplus lines agent here,
A) The transaction is a foreign transaction that is still technically lawful
pg. 2
,B) The transaction would still qualify as the lawful transaction of surplus lines
insurance
C) The transaction would not qualify as the lawful transaction of surplus lines
insurance - ANSWER-C) The transaction would not qualify as the lawful
transaction of surplus lines insurance
(9) The Terrorism Risk Insurance Act (TRIA):
A) Applies to surplus lines policies
B) Does not apply to surplus lines policies - ANSWER-A) Applies to surplus lines
policies.
(10) A surplus lines policy:
A) Is still covered by the state guaranty fund when placed locally
B) Is covered by the state guaranty fund as long as it is placed via a licensed broker
or agent.
C) Is not covered by the state guaranty fund - ANSWER-C) Is not covered by the
state guaranty fund
(11) For surplus lines insurers, the relative freedom from form and rate regulation
give:
A)Flexibility
B) Legal Waiver
C) Cost Advantage
D) The right of non-disclosure - ANSWER-A) Flexibility
(12) In the context of insurance, losses depend primarily on which two variables:
A) The background
B) The number of losses
pg. 3
, C) The amount involved
D) The nature of events
E) The policy - ANSWER-B) The number of losses
C) The amount involved
(13) Who must verify the financial strength and viability of a nonadmitted insurer?
A) The insurance commission
B) The department of commerce
C) The surplus line broker/agent
D) The guarantee association of the state - ANSWER-C) The surplus line
broker/agent
(14) During the time of a hard market, insurers will:
A) Tighten their underwriting standards
B) Loosen their underwriting standards - ANSWER-A) Tighten their underwriting
standards.
Tighten and raise premiums.
(15) Surplus Lines premiums typically expand during:
A) A soft Market
B) A Hard Market - ANSWER-A Hard Market.
Surplus lines premiums typically expand during a hard market.
pg. 4
Michigan Surplus Lines Exam 2025-2026 Prep/
Michigan Surplus Lines Insurance Test Prep
(1)In Michigan, a surplus lines producer must report surplus lines or non admitted
insurance business written for a Michigan risk on what basis?
A) Monthly
B) Quarterly
C) Semi-Annually
D) Annually - ANSWER-C) Semi-Annually
(2) Which of these imposes a set of national eligibility standards for surplus lines
insurers domiciled in any US jurisdiction?
A) NRCA
B) NRTT
C) NRAS
D) NRRA - ANSWER-D) NRRA (National Risk Retention Association)
(3) 100% of surplus lines tax is payable to Michigan if Michigan is the home state
of:
A) The insurer
B) The insured - ANSWER-B) The insured
(4) In Michigan, a transaction that takes place in April needs to be reported by:
A) August 15th
B) September 15th
pg. 1
,C) October 15th
D) November 15th - ANSWER-A) August 15th
(5) A surplus lines insurer:
A) Has to be licensed and admitted in the same state as the broker
B) Is not always licensed or admitted in the same state as the broker - ANSWER-
B) Is not always licensed or admitted in the same state as the broker
(6) Karl the fortune teller believes that the world is full of uncertainty, and so is his
destiny. He often engages himself in extreme sports activities for fun and for
challenge. He thinks he will need more insurance coverage in the future. He prefers
a surplus line policy.
A) This is a good idea
B) This is probably not a good idea - ANSWER-B) This is probably not a good
idea
Surplus lines is for hard to place risk. nothing about this is really hard to place, and
he should maybe just buy more life insurance.
(7) A domestic surplus lines company must be licensed in at least one state or other
US jurisdiction.
True or False - ANSWER-True
(8) When a surplus lines insurance for coverage in this state is not placed through a
licensed surplus lines agent here,
A) The transaction is a foreign transaction that is still technically lawful
pg. 2
,B) The transaction would still qualify as the lawful transaction of surplus lines
insurance
C) The transaction would not qualify as the lawful transaction of surplus lines
insurance - ANSWER-C) The transaction would not qualify as the lawful
transaction of surplus lines insurance
(9) The Terrorism Risk Insurance Act (TRIA):
A) Applies to surplus lines policies
B) Does not apply to surplus lines policies - ANSWER-A) Applies to surplus lines
policies.
(10) A surplus lines policy:
A) Is still covered by the state guaranty fund when placed locally
B) Is covered by the state guaranty fund as long as it is placed via a licensed broker
or agent.
C) Is not covered by the state guaranty fund - ANSWER-C) Is not covered by the
state guaranty fund
(11) For surplus lines insurers, the relative freedom from form and rate regulation
give:
A)Flexibility
B) Legal Waiver
C) Cost Advantage
D) The right of non-disclosure - ANSWER-A) Flexibility
(12) In the context of insurance, losses depend primarily on which two variables:
A) The background
B) The number of losses
pg. 3
, C) The amount involved
D) The nature of events
E) The policy - ANSWER-B) The number of losses
C) The amount involved
(13) Who must verify the financial strength and viability of a nonadmitted insurer?
A) The insurance commission
B) The department of commerce
C) The surplus line broker/agent
D) The guarantee association of the state - ANSWER-C) The surplus line
broker/agent
(14) During the time of a hard market, insurers will:
A) Tighten their underwriting standards
B) Loosen their underwriting standards - ANSWER-A) Tighten their underwriting
standards.
Tighten and raise premiums.
(15) Surplus Lines premiums typically expand during:
A) A soft Market
B) A Hard Market - ANSWER-A Hard Market.
Surplus lines premiums typically expand during a hard market.
pg. 4
