2025 WA SURPLUS EXAM 2.0 || 100+ ACTUAL
QUESTIONS AND CORRECT ANSWERS
1. In Washington, what types of actions must be reported by surplus lines
brokers: Surplus lines brokers must report transactions, premium taxes, and any
placements with non-admitted insurers.
2. How often are surplus lines brokers required to report transactions to the
state insurance commissioner?: Surplus lines brokers are required to report
transactions quarterly.
3. What is the purpose of surplus lines insurance in Washington State?: Sur-
plus lines insurance provides coverage for unique, complex, or high-risk exposures
that are not available in the admitted market.
4. How does surplus lines insurance benefit consumers and businesses in
Washington State?: Surplus lines insurance allows consumers and businesses to
obtain coverage for risks that admitted insurers may not be willing or able to cover,
ensuring that they can adequately protect their assets and liabilities.
5. : What records must surplus lines brokers maintain in Washington State?-
: Surplus lines brokers must maintain records of all transactions, including docu-
mentation of diligent search efforts, declinations from admitted insurers, and policy
details for placed coverage.
6. For how long are surplus lines brokers required to maintain records of
transactions in Washington State?: Surplus lines brokers must maintain records
of transactions for at least five years
7. What types of risks are eligible for coverage in the surplus lines market in
Washington State?: Risks eligible for coverage in the surplus lines market include
unique, complex, or high-risk exposures that cannot be adequately insured by
admitted insurers.
8. What is the diligent search requirement, and how does it relate to coverage
eligibility in Washington State?: The diligent search requirement mandates that
a surplus lines broker must first attempt to place coverage with admitted insurers
before seeking coverage in the surplus lines market. Coverage is eligible for the
surplus lines market if the broker can demonstrate that admitted insurers are unable
or unwilling to provide the necessary coverage.
9. In the context of Washington State surplus lines insurance, what is the
difference between an authorized insurer and an unauthorized insurer?: An
,authorized insurer is licensed and regulated by the state and is a member of the
state guaranty fund. Unauthorized insurers, also known as non-admitted insurers,
are not subject to the same regulations and are not members of the state guaranty
fund, but they can provide coverage for risks not available in the admitted market.
10. How are premiums for surplus lines insurance policies determined in
Washington State?: Premiums for surplus lines policies are determined by the
, insurer based on the specific risk characteristics, and they are not subject to state
rate regulations.
11. What type of document serves as evidence of insurance for a surplus lines
policy in Washington State?: A surplus lines insurance policy, binder, or certificate
of insurance serves as evidence of insurance for a surplus lines policy.
12. What is the surplus lines tax rate in Washington State?: The surplus lines
tax rate in Washington State is 2% of the gross written premium.
13. When are surplus lines tax payments due in Washington State?: Surplus
lines tax payments are due quarterly, along with the required tax report.
14. What conditions must be met before a surplus lines broker can procure
coverage from a non-admitted insurer in Washington State?: The broker must
perform a diligent search of the admitted market, document declinations from admit-
ted insurers, and confirm that the non-admitted insurer meets the state's eligibility
requirements.
15. What is the role of the Washington Surplus Lines Association in the
procurement process?: The Washington Surplus Lines Association serves as a
stamping office, reviewing and stamping all surplus lines policies to ensure compli-
ance with state laws and regulations.
16. How are multi-state risks handled in the context of surplus lines insurance
in Washington State?: For multi-state risks, the broker must allocate the premium
and taxes based on the exposures in each state and comply with the surplus lines
laws and regulations of each applicable state.
17. What is the purpose of the Nonadmitted and Reinsurance Reform Act
(NRRA) in relation to multi-state risks?: The NRRA simplifies the regulatory
process for multi-state risks by establishing that only the insured's home state can
regulate and tax a surplus lines transaction.
18. What are the qualifications for an alien insurer to be eligible as a sur-
plus lines insurer in Washington State?: An alien insurer must be listed on the
Quarterly Listing of Alien Insurers maintained by the NAIC's International Insurers
Department (IID) and meet minimum capital and surplus requirements.
19. What is the role of the United States trust fund for alien insurers?: The
U.S. trust fund is required for alien insurers to provide financial protection for U.S.
policyholders by maintaining funds in a U.S. financial institution to satisfy claims and
other liabilities.
20. What are the qualifications for a foreign insurer to be eligible as a surplus
lines insurer in Washington State?: A foreign insurer must be authorized by the
state insurance commissioner, meet minimum capital and surplus requirements, and
maintain a satisfactory financial rating from a recognized rating agency.
QUESTIONS AND CORRECT ANSWERS
1. In Washington, what types of actions must be reported by surplus lines
brokers: Surplus lines brokers must report transactions, premium taxes, and any
placements with non-admitted insurers.
2. How often are surplus lines brokers required to report transactions to the
state insurance commissioner?: Surplus lines brokers are required to report
transactions quarterly.
3. What is the purpose of surplus lines insurance in Washington State?: Sur-
plus lines insurance provides coverage for unique, complex, or high-risk exposures
that are not available in the admitted market.
4. How does surplus lines insurance benefit consumers and businesses in
Washington State?: Surplus lines insurance allows consumers and businesses to
obtain coverage for risks that admitted insurers may not be willing or able to cover,
ensuring that they can adequately protect their assets and liabilities.
5. : What records must surplus lines brokers maintain in Washington State?-
: Surplus lines brokers must maintain records of all transactions, including docu-
mentation of diligent search efforts, declinations from admitted insurers, and policy
details for placed coverage.
6. For how long are surplus lines brokers required to maintain records of
transactions in Washington State?: Surplus lines brokers must maintain records
of transactions for at least five years
7. What types of risks are eligible for coverage in the surplus lines market in
Washington State?: Risks eligible for coverage in the surplus lines market include
unique, complex, or high-risk exposures that cannot be adequately insured by
admitted insurers.
8. What is the diligent search requirement, and how does it relate to coverage
eligibility in Washington State?: The diligent search requirement mandates that
a surplus lines broker must first attempt to place coverage with admitted insurers
before seeking coverage in the surplus lines market. Coverage is eligible for the
surplus lines market if the broker can demonstrate that admitted insurers are unable
or unwilling to provide the necessary coverage.
9. In the context of Washington State surplus lines insurance, what is the
difference between an authorized insurer and an unauthorized insurer?: An
,authorized insurer is licensed and regulated by the state and is a member of the
state guaranty fund. Unauthorized insurers, also known as non-admitted insurers,
are not subject to the same regulations and are not members of the state guaranty
fund, but they can provide coverage for risks not available in the admitted market.
10. How are premiums for surplus lines insurance policies determined in
Washington State?: Premiums for surplus lines policies are determined by the
, insurer based on the specific risk characteristics, and they are not subject to state
rate regulations.
11. What type of document serves as evidence of insurance for a surplus lines
policy in Washington State?: A surplus lines insurance policy, binder, or certificate
of insurance serves as evidence of insurance for a surplus lines policy.
12. What is the surplus lines tax rate in Washington State?: The surplus lines
tax rate in Washington State is 2% of the gross written premium.
13. When are surplus lines tax payments due in Washington State?: Surplus
lines tax payments are due quarterly, along with the required tax report.
14. What conditions must be met before a surplus lines broker can procure
coverage from a non-admitted insurer in Washington State?: The broker must
perform a diligent search of the admitted market, document declinations from admit-
ted insurers, and confirm that the non-admitted insurer meets the state's eligibility
requirements.
15. What is the role of the Washington Surplus Lines Association in the
procurement process?: The Washington Surplus Lines Association serves as a
stamping office, reviewing and stamping all surplus lines policies to ensure compli-
ance with state laws and regulations.
16. How are multi-state risks handled in the context of surplus lines insurance
in Washington State?: For multi-state risks, the broker must allocate the premium
and taxes based on the exposures in each state and comply with the surplus lines
laws and regulations of each applicable state.
17. What is the purpose of the Nonadmitted and Reinsurance Reform Act
(NRRA) in relation to multi-state risks?: The NRRA simplifies the regulatory
process for multi-state risks by establishing that only the insured's home state can
regulate and tax a surplus lines transaction.
18. What are the qualifications for an alien insurer to be eligible as a sur-
plus lines insurer in Washington State?: An alien insurer must be listed on the
Quarterly Listing of Alien Insurers maintained by the NAIC's International Insurers
Department (IID) and meet minimum capital and surplus requirements.
19. What is the role of the United States trust fund for alien insurers?: The
U.S. trust fund is required for alien insurers to provide financial protection for U.S.
policyholders by maintaining funds in a U.S. financial institution to satisfy claims and
other liabilities.
20. What are the qualifications for a foreign insurer to be eligible as a surplus
lines insurer in Washington State?: A foreign insurer must be authorized by the
state insurance commissioner, meet minimum capital and surplus requirements, and
maintain a satisfactory financial rating from a recognized rating agency.
