Which of the following best explains the role of the broker regarding surplus lines insurers?

The role of the broker regarding surplus lines insurers primarily involves evaluating the eligibility of the insurer. Surplus lines insurance is typically used when coverage cannot be obtained from admitted carriers, which are the licensed insurers in a particular state. Therefore, it is crucial for brokers to assess which surplus lines insurers meet regulatory requirements and are financially stable enough to provide coverage.

Brokers must ensure that the insurers they work with are authorized to write surplus lines insurance in the state where the risk is located. This includes verifying that the insurer has the necessary financial backing and is approved by the state's insurance department to operate in the surplus lines market. This evaluation protects the interests of the policyholders by ensuring that they are purchasing insurance from reputable providers capable of fulfilling their claims obligations.

The other options do not accurately reflect the broker's responsibilities in this context. Issuing policies is a function of insurers rather than brokers, while setting state regulations is a role designated to state insurance departments. Serving as a primary source of claims payment is also not accurate, as claims payments are the responsibility of the insurer, not the broker. Thus, the broker's critical responsibility is indeed to evaluate insurer eligibility, which underscores their position as intermediaries in the surplus lines market.