Which of the following is true about California’s requirement for surplus lines brokers?

While surplus lines brokers do need to be licensed, they are not limited to being licensed strictly as property-casualty brokers. They can also hold licenses in other categories, depending on the types of coverage they place. This choice inaccurately restricts the licensing requirements for brokers in California.

Surplus lines brokers are specifically authorized to place coverage with non-admitted insurers. This means they can arrange insurance with companies that are not licensed in California, which is a defining feature of surplus lines transactions. Therefore, this statement is incorrect as it contradicts the fundamental nature of surplus lines insurance.

While surplus lines brokers have specific reporting requirements, they are not mandated to file affidavits after every placement. Instead, they must file a report with the California Department of Insurance regarding their surplus lines placements, but this does not entail filing an affidavit for each transaction. This option misrepresents the procedural obligations of brokers.