Can a surplus lines broker also act as an agent for an admitted insurer?

The role of a surplus lines broker is specialized, allowing them to place insurance with non-admitted insurers when coverage is not available through admitted carriers. However, they can also operate as an agent for an admitted insurer under specific conditions. The key aspect here is the need for a clear distinction to clients when fulfilling these dual roles. This requirement ensures that clients are aware of the different capacities in which the broker is operating—either as a surplus lines broker or as an agent of an admitted insurer. Clarity in communication prevents any confusion about the source of the insurance and the respective protections or benefits, thus maintaining transparency in the insurance transaction process.

This understanding defines why the answer indicating that a surplus lines broker can act as an agent for an admitted insurer—provided there's a clear distinction made to clients—is appropriate for the practice and ethical standards governing insurance operations in Colorado.