What best describes the flow of an insurance transaction involving a Surplus Lines Intermediary?

The correct answer provides a clear representation of the typical flow in an insurance transaction involving a Surplus Lines Intermediary. In this process, the insured first engages with a retail producer, often referred to as an insurance agent or broker. The retail producer assesses the insured’s needs and determines whether conventional insurance options from admitted insurers can satisfy those needs.

However, if the risks involved are too great or if the coverage cannot be obtained from an admitted insurer, the retail producer will then turn to a Surplus Lines Intermediary. This intermediary specializes in placing risks that are beyond the capacity of traditional insurers. They evaluate the unique circumstances surrounding the risk and can access a variety of surplus lines insurers that are not subject to the same regulatory constraints as admitted carriers.

Once the Surplus Lines Intermediary identifies an appropriate surplus lines insurer that can offer the necessary coverage, they facilitate the transaction, providing the insured with the tailored insurance solutions they require. This structured flow represents the necessary steps taken to manage non-standard or high-risk exposures in the insurance market.