Glossary

Diligent search

The effort a surplus lines broker must make to find coverage from admitted insurers before placing a risk with a non-admitted insurer.

Also called: diligent effort, due diligence search, declination requirement, admitted market search

Surplus lines exist to fill gaps the admitted market leaves, so states generally require proof that the admitted market was tried first. That proof is the diligent search, which some statutes call a diligent effort. Before placing a risk with a non-admitted insurer, the broker must show that admitted insurers writing that class declined it or could not supply the full coverage.

The standard varies by state. Texas allows surplus lines only when the full amount of insurance cannot be obtained, after a diligent effort, from insurers authorized in the state (Insurance Code section 981.004), and sets no count. Other states use a number: Colorado and Connecticut, for instance, work from three declinations by admitted insurers that write the coverage. The effort is usually documented in an affidavit or statement filed with the state or its stamping office.

Federal law adds an exception. Under the Nonadmitted and Reinsurance Reform Act (15 U.S.C. sections 8205 and 8206), a broker need not run a state-required search for an exempt commercial purchaser, a large buyer meeting premium, risk manager and size tests, once the broker has made the required disclosures and the buyer asks in writing for a non-admitted placement.

For the buyer, a surplus lines placement means giving up guaranty fund protection and filed forms, so ask what admitted options were tried. surplus lines taxes, stamping fees and diligent search covers the filings, and excess and surplus lines and non-admitted insurer explain the market.

Last reviewed October 10, 2026

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Related terms

Excess and surplus lines Insurance placed with non-admitted insurers for risks the standard market declines or cannot price, with freer forms and rates but less regulatory protection. Non-admitted insurer An insurer not licensed in your state that may still write coverage there through a surplus lines broker, outside the state's rate and form filing rules. Admitted insurer An insurance company licensed by a state's insurance department to sell policies there, subject to that state's filing rules and guaranty fund protection. Surplus lines broker A specially licensed broker who places coverage with non-admitted insurers after the admitted market has declined, and handles the required filings and taxes. Stamping fee A charge on a surplus lines policy that pays the state or its stamping office to review and record the placement, collected from the buyer with the premium.

Related guides

Admitted vs non-admitted insurers: what the difference means Admitted insurers are licensed in your state and backed by its guaranty fund. Non-admitted (surplus lines) insurers are not. What that changes for your policy. Excess and surplus lines insurance explained What E&S insurance is, why risks go to non-admitted insurers, what you give up in guaranty fund protection, and how surplus lines taxes and filings work. Declined for coverage? Where hard-to-place businesses find insurance Why standard insurers decline some businesses and where to go next: surplus lines, assigned risk, FAIR Plans, risk retention groups and fixes that work. Surplus lines taxes, stamping fees and diligent search How surplus lines premium tax, stamping fees and diligent search work under the NRRA, with 2026 rates for several states and a worked example of the invoice. Wholesale brokers and surplus lines placement: how hard risks get insured How wholesale brokers place hard-to-insure risks with surplus lines insurers: the retail broker role, diligent search, taxes, stamping offices and buyer impact.