The Surplus Lines Market

The Specialty Lines Market – What is It?

The specialty lines insurance market is the segment of the insurance industry which deals primarily in difficult or unusual risks are written. For insureds unable to secure insurance coverage from licensed companies, the surplus lines market provides an alternative market with flexibility, additional capacity and innovative underwriting.Much of the specialty lines market is characterized by a high degree of specialization by both brokers and insurers.

The surplus lines market goes by a variety of names, including the following:


  • Excess and Surplus Lines Market
  • E & S Market
  • Non-admitted Market


The licensed market goes by a complementary set of names, including:


  • Licensed Market
  • Standard Market
  • Admitted Market


Insurers operating in the surplus lines market are generally small, specialty insurers or specialized divisions of larger insurance organizations. In either case, the participants have significant experience and expertise with segments of the unusual coverages and businesses found in the surplus lines market.

Is the Excess and Surplus Lines Market Regulated?

State insurance departments regulate surplus lines insurers operating in their state, including monitoring solvency.  Surplus lines insurer solvency has historically been strong. A number of the largest surplus lines insurers are well-capitalized subsidiaries of the largest insurance and financial services companies in the US.

Unlike admitted companies, surplus lines insurers have freedom from rate and form filing. In other words, they do not have to file insurance rates and policy forms with the insurance department. Coverage placed with surplus lines insurers is generally not protected by state guarantee funds.

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