FLORIDA SURPLUS LINES LICENSE (1-
20) EXAM QUESTIONS AND ANSWERS |
2026 UPDATE | 100% CORRECT.
Admitted insurer - ANS Also called an "authorized insurer"
Licensed by the state insurance department do insurance business in the insured's home state
FL admitted insurers have a Certificate of Authority (COA)
Non-admitted insurer - ANS Also called an "unauthorized insurer"
Not licensed to do business in the insured's home state
Non-admitted insurers can be made eligible to write insurance in FL by the FL Office of
Insurance Regulation (OIR) under the FL Surplus Lines Law
Unauthorized (non-admitted) insurers that are eligible in FL cannot _______________ -
ANS Be domiciled in FL
How does the regulatory framework for surplus lines protect both consumers and states? -
ANS Permit consumers access to surplus lines insurers without physically leaving their state
Uses specially trained and licensed agents to assist consumers
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 36
,Establish of a system for collecting taxes
Gives the states control of eligibility standards for non-admitted insurers, and the types of risks
they insure
Independently procured coverage (IPC) - ANS Insured contacts a non-admitted carrier directly
(no agent involved) to place their risk in the surplus lines market.
Insured is responsible for filing the transaction with FSLSO, as well as filing the taxes, fees, and
assessments for the policy.
Domestic insurer - ANS An insurer who is licensed in the state in which they are domiciled.
Domestic insurers are typically admitted in their state of domicile.
Foreign insurer - ANS An insurer whose principal office or domicile location is in a state that's
different from the state in which it's transacting insurance business.
Alien insurer - ANS An insurer whose principal office or domicile location is outside of the
United States.
All surplus lines insurers must be licensed in ________________ - ANS Their home state or
jurisdiction, whether it is in the US or another country.
Nonadmitted and Reinsurance Reform Act (NRRA) - ANS Legislation passed on July 21, 2011,
as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act to create a federally
regulated system.
Agents may place business with alien insurers found on the NAIC's Quarterly Listing of Alien
Insurers, also known as the IID List, regardless of if they qualify for a state's eligibility
requirements.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 36
,Establishes uniform minimum capital and surplus eligibility requirements for foreign insurers.
Grants an insured's home state exclusive authority to regulate and tax multistate non-admitted
insurance policies.
Distressed risk - ANS A risk characterized by unfavorable attributes that have made it
unacceptable to admitted insurers
Unique risk - ANS A risk that is too difficult to evaluate because no policy form meets its
unusual needs, no prior loss experience can be analyzed, and it's not cost-effective to generate a
quote
High-capacity risk - ANS A risk that requires high limits of insurance that may exceed the
underwriting criteria of admitted insurers
Underwriting cycle - ANS A cyclical pattern of insurance pricing in the admitted market which
a soft market (low rates, relaxed underwriting, and underwriting losses) is eventually followed
by a hard market (high rates, restrictive underwriting, and underwriting gains) before the
pattern again repeats itself.
Reinsurance - ANS Insurance for insurance - a contractual agreement to spread risk and
premium among two or more insurers
What is the minimum capitalization requirement for a reinsurer in Florida? - ANS $20 million
What is the minimum capitalization requirement for a non-admitted insurer in Florida? -
ANS $15 million
What is the minimum capitalization requirement for a foreign insurer in Florida? - ANS $15
million
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 36
, What is the minimum capitalization requirement for an alien insurer in Florida? - ANS $15
million, and a trust fund requirement of $5.4 million
Facultative reinsurance - ANS The primary insurer and reinsurers negotiate terms and
premium for each policy or risk individually
Treaty reinsurance - ANS There is one agreement for an entire class or a book of business,
and all policies are typically reinsured
What are the three types of surplus lines agents? - ANS Wholesalers
Managing general agents
Program managers
1752 - ANS Ben Franklin establishes the first insurer in America - The Contributorship for the
Preservation and Protection of Houses from Fire
1794 - ANS PA legislature attempts to regulate and control insurers for the first time
Mid 1800s - ANS Insurance regulation becomes more common, taxes, and fees are levied on
insurers and agents, domestic and foreign insurers must provide reports to the states
1841 - ANS NH establishes the first separate insurance department
1868 thru 1933 - ANS Congress proposes on six separate occasions to replace state regulation
of the insurance industry with federal regulation. None of the proposals pass.
1869 - ANS NY becomes the first state to create a state insurance department headed by a
single superintendent.
Supreme Court decision in Paul v. Virginia establishes that states will have jurisdiction over
regulating insurance. The court held that corporations were not persons, and an insurance
@COPYRIGHT ALL RIGHTS RESERVED PAGE 4 OF 36
20) EXAM QUESTIONS AND ANSWERS |
2026 UPDATE | 100% CORRECT.
Admitted insurer - ANS Also called an "authorized insurer"
Licensed by the state insurance department do insurance business in the insured's home state
FL admitted insurers have a Certificate of Authority (COA)
Non-admitted insurer - ANS Also called an "unauthorized insurer"
Not licensed to do business in the insured's home state
Non-admitted insurers can be made eligible to write insurance in FL by the FL Office of
Insurance Regulation (OIR) under the FL Surplus Lines Law
Unauthorized (non-admitted) insurers that are eligible in FL cannot _______________ -
ANS Be domiciled in FL
How does the regulatory framework for surplus lines protect both consumers and states? -
ANS Permit consumers access to surplus lines insurers without physically leaving their state
Uses specially trained and licensed agents to assist consumers
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 36
,Establish of a system for collecting taxes
Gives the states control of eligibility standards for non-admitted insurers, and the types of risks
they insure
Independently procured coverage (IPC) - ANS Insured contacts a non-admitted carrier directly
(no agent involved) to place their risk in the surplus lines market.
Insured is responsible for filing the transaction with FSLSO, as well as filing the taxes, fees, and
assessments for the policy.
Domestic insurer - ANS An insurer who is licensed in the state in which they are domiciled.
Domestic insurers are typically admitted in their state of domicile.
Foreign insurer - ANS An insurer whose principal office or domicile location is in a state that's
different from the state in which it's transacting insurance business.
Alien insurer - ANS An insurer whose principal office or domicile location is outside of the
United States.
All surplus lines insurers must be licensed in ________________ - ANS Their home state or
jurisdiction, whether it is in the US or another country.
Nonadmitted and Reinsurance Reform Act (NRRA) - ANS Legislation passed on July 21, 2011,
as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act to create a federally
regulated system.
Agents may place business with alien insurers found on the NAIC's Quarterly Listing of Alien
Insurers, also known as the IID List, regardless of if they qualify for a state's eligibility
requirements.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 36
,Establishes uniform minimum capital and surplus eligibility requirements for foreign insurers.
Grants an insured's home state exclusive authority to regulate and tax multistate non-admitted
insurance policies.
Distressed risk - ANS A risk characterized by unfavorable attributes that have made it
unacceptable to admitted insurers
Unique risk - ANS A risk that is too difficult to evaluate because no policy form meets its
unusual needs, no prior loss experience can be analyzed, and it's not cost-effective to generate a
quote
High-capacity risk - ANS A risk that requires high limits of insurance that may exceed the
underwriting criteria of admitted insurers
Underwriting cycle - ANS A cyclical pattern of insurance pricing in the admitted market which
a soft market (low rates, relaxed underwriting, and underwriting losses) is eventually followed
by a hard market (high rates, restrictive underwriting, and underwriting gains) before the
pattern again repeats itself.
Reinsurance - ANS Insurance for insurance - a contractual agreement to spread risk and
premium among two or more insurers
What is the minimum capitalization requirement for a reinsurer in Florida? - ANS $20 million
What is the minimum capitalization requirement for a non-admitted insurer in Florida? -
ANS $15 million
What is the minimum capitalization requirement for a foreign insurer in Florida? - ANS $15
million
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 36
, What is the minimum capitalization requirement for an alien insurer in Florida? - ANS $15
million, and a trust fund requirement of $5.4 million
Facultative reinsurance - ANS The primary insurer and reinsurers negotiate terms and
premium for each policy or risk individually
Treaty reinsurance - ANS There is one agreement for an entire class or a book of business,
and all policies are typically reinsured
What are the three types of surplus lines agents? - ANS Wholesalers
Managing general agents
Program managers
1752 - ANS Ben Franklin establishes the first insurer in America - The Contributorship for the
Preservation and Protection of Houses from Fire
1794 - ANS PA legislature attempts to regulate and control insurers for the first time
Mid 1800s - ANS Insurance regulation becomes more common, taxes, and fees are levied on
insurers and agents, domestic and foreign insurers must provide reports to the states
1841 - ANS NH establishes the first separate insurance department
1868 thru 1933 - ANS Congress proposes on six separate occasions to replace state regulation
of the insurance industry with federal regulation. None of the proposals pass.
1869 - ANS NY becomes the first state to create a state insurance department headed by a
single superintendent.
Supreme Court decision in Paul v. Virginia establishes that states will have jurisdiction over
regulating insurance. The court held that corporations were not persons, and an insurance
@COPYRIGHT ALL RIGHTS RESERVED PAGE 4 OF 36
