Surplus Lines Insurance in Connecticut: What It Is and How It Works
If the standard market has declined you, this explains what surplus lines insurance is, who may place it and what changed on October 1, 2026.
If a standard insurer says no, your policy may be placed this way, and it works a little differently. Some hard to place risks are insured by surplus lines carriers. These carriers are not licensed by the state as admitted insurers. Their policies can cost more, cover less or differently, and follow different cancellation and nonrenewal notice rules. They are generally not covered by the state insurance guaranty fund if the carrier fails. Surplus lines coverage is placed through a licensed surplus lines broker. We explain the differences to you in writing before you decide.
This article is general information about how insurance usually works in Connecticut. Your policy’s own wording decides what it covers. Ask us about yours.
Short Answer
A resident surplus lines broker must hold a property and casualty producer license and pass the surplus lines exam. Public Act 26-69 eliminated the diligent effort requirement, effective October 1, 2026. You can ask for the differences from a standard policy in writing before you decide.
What Surplus Lines Insurance Is
Surplus lines coverage is written by a non admitted carrier and placed through a licensed surplus lines broker.
Who May Place Surplus Lines Coverage
A Connecticut resident surplus lines broker must already hold a property and casualty producer license and pass the surplus lines exam. Insurance is regulated mainly by the states under federal law. Vow Insurance Partners reaches the surplus lines market through licensed surplus lines brokers. A licensed surplus lines broker places the coverage.
What Changed on October 1, 2026
Public Act 26-69 eliminated Connecticut’s surplus lines diligent effort requirement, effective October 1, 2026.
How It Differs from a Standard Policy
The Insurance Commissioner recommends that agents disclose the differences between surplus lines and admitted policies in four areas.
- Cost.
- Coverage.
- Cancellation notice rules.
- Guaranty association coverage.
You can ask for these differences in writing before you decide.
Tax and Fees
- Home state.
- Connecticut is the home state for surplus lines tax when the insured’s principal place of business is in Connecticut, even if some of the risk is elsewhere.
- Returns.
- Surplus lines tax returns are due quarterly, on February 15, May 15, August 15 and November 15.
- Service fees.
- A producer and a surplus lines broker on the same surplus lines policy may charge flat fees totaling no more than $250, or up to 5 percent of premium totaling no more than $500. No service fee may be charged without a signed written memorandum showing the premium and the fee. Service fees are not allowed on routine renewals unless the risk is re underwritten.
Residual Market Note
A surplus lines license does not cover insurance that can be placed through a residual market mechanism.
Frequently Asked Questions
What is surplus lines insurance?
Surplus lines coverage is written by a non admitted carrier and placed through a licensed surplus lines broker.
Who can place surplus lines coverage in Connecticut?
A licensed surplus lines broker places it, and a resident broker must hold a property and casualty producer license and pass the surplus lines exam.
Is a surplus lines policy the same as a standard policy?
No. A surplus lines policy can differ in cost, coverage, cancellation notice rules and guaranty association coverage.
Is Connecticut’s diligent effort rule still in force?
No. Public Act 26-69 eliminated it effective October 1, 2026.
Does Vow Insurance Partners place surplus lines coverage?
We reach the surplus lines market through licensed surplus lines brokers. For how an account is worked, see Hard to Place Insurance.
Sources
- Connecticut Insurance Department, Surplus Lines Broker
- Connecticut Insurance Department Bulletin SL-7 (October 1, 2026)
- Regulations of Connecticut State Agencies 38a-707-3, 38a-707-7, 38a-707-8, 38a-707-9
- 15 U.S.C. 8206
- 15 U.S.C. 1012
- Connecticut Insurance Department Bulletin SL-6 (rescinded; used only for its quotation of C.G.S. 38a-794)