White List States

The group of U.S. states that permit the addition of specialized liability or property coverage by a nonadmitted insurer in the policy. White list states allow surplus lines for coverage provided by a nonadmitted insurer in the event that this coverage is currently unavailable from insurers that are licensed by the state. Surplus line producers can provide coverage for risks that the licensed insurers will not accept because they do not meet their guidelines or the risk is too unusual or large.

Each white list state may have a long list of eligible surplus line suppliers. Surplus line insurers are not necessarily unable to become licensed in a state; they typically choose to operate on a surplus line and unlicensed basis in certain states. Because they are not licensed in a particular state, they are not regulated by that state’s Department of Insurance in the same manner as the licensed insurers, which gives them more leeway in terms or rate and form regulation.

The surplus lines market is also referred to as the specialty, nonadmitted or excess lines market.