The National Association of Professional Surplus Lines Offices, Ltd. (NAPSLO) is a national trade association representing the surplus lines industry and the wholesale insurance marketing system.

Since it was founded in 1975, NAPSLO has become the authoritative voice of surplus lines. Acting as a source of information, NAPSLO spends a great deal of time identifying and explaining to regulatory, other segments of the insurance industry, the media and the public the vital role surplus lines plays in the insurance industry. (For more information, see History of NAPSLO)

The Role of the Surplus Lines Market
The surplus lines industry is important because it provides a market for insurance covering hard to place risks that are not written by the standard markets. There are three basic categories of surplus lines risks: Non-standard risks which have unusual underwriting characteristics; Unique risks which admitted carriers do not offer a filed policy form or rate; and Capacity risks where a client seeks a higher level of coverage. Examples of such risks include aviation, product liability, inland marine, earthquake, and professional liability.

Since 1994 the A.M Best Company has performed an annual survey of the excess and surplus lines market and has found that its solvency record is as good, if not better, than the overall industry.

NAPSLO's Involvement

The NAPSLO logo is inscribed with the Latin phrase "Uberrima Fides," which means "in the utmost good faith." This serves as a symbol of the professionalism, and purpose of the members and the association. Applicants must meet financial and conduct standards in order to join the association and NAPSLO members must follow a code of ethics in dealing with customers and companies. Dealing with a NAPSLO member ensures that you are dealing with a knowledgeable surplus lines broker or company. 

Members are kept up to date by NAPSLO concerning changes in the industry. The association works with regulators regarding relevant legislation, provides educational opportunities and seminars, and offers other important services to its members and the industry. In doing so, NAPSLO and its members can provide additional value by knowing when new insurance products are needed and offering them to answer the needs of the ever changing social and insurance environment.

Meeting the Needs of Consumers

The surplus lines market plays an important role in providing insurance for hard to place risks. With the ability to accommodate a wide variety of risks, the surplus lines market acts as a compliment to the admitted market. Often called the "safety valve" of the insurance industry, surplus lines fills the need for coverage in the marketplace by insuring those risks that would otherwise not be protected. 

Surplus lines companies are able to offer specialty insurance in large part because they are free of rate and form restrictions imposed on other insurance carriers. In this way, companies are able to react to changes in the market and design a policy that meets the needs of the insurer and the insured. While surplus lines companies may not be regulated as traditional carriers, that does not mean they are not regulated. Each company must be licensed (admitted) in one of the 50 states and must meet the solvency requirements of that state. As a result, the state of domicile becomes the regulator over that insurer.