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When is it acceptable to write coverage in the surplus lines market?
It is acceptable to write coverage after the producer (agent) has engaged the process of searching for coverage with authorized insurers or when a Michigan resident insists that insurance be placed with an unauthorized insurer that is not recognized by the commissioner as eligible. The provisions of MCL 500.1910(2)(d), MCL 500.1910(3), MCL 500.1920(1), and MCL 500.1950 contemplate that a producer will make a search of authorized insurers in order to subsequently qualify the coverage as eligible to be written by a surplus lines insurer and that the producer offer surplus lines insurance only to insurers that are in stable and unimpaired financial condition.
Alternately, if the type of coverage is listed on the DIFS website on the Surplus Lines Eligible Insurance Coverages List (Export List), then a producer could automatically represent an insurer that could write that coverage in the surplus lines market.