Which of the following is NOT a characteristic of excess and surplus lines insurance?

Excess and surplus lines insurance is designed to provide coverage for businesses or individuals that fall outside the parameters of standard insurance policies. One of its defining characteristics is its ability to address high-risk situations and unusual risk circumstances that traditional insurers might not cover.

The correct response highlights that excess and surplus lines insurance is not exclusively offered by licensed insurers. In fact, this type of insurance can be provided by non-admitted carriers—insurers that do not hold a license in the specific state where the insurance is being sold. This allows for greater flexibility in offering coverage solutions that are tailored to the specific needs of high-risk clients or unique situations.

Additionally, excess and surplus lines can go beyond the standard limits typically imposed by conventional insurance policies, making it a key resource for businesses requiring specialized coverage. Thus, the distinction around licensing emphasizes the unique nature of this sector within the insurance market.