Which entity can grant reciprocity for a non-resident in relation to surplus lines?

The National Risk Retention Act (NRRA) is the correct answer because it establishes guidelines for non-resident surplus lines brokers and promotes uniformity across states in the regulation of surplus lines insurance. One of the key provisions of the NRRA is that it allows states to grant reciprocity to non-resident brokers, meaning that if a broker is licensed in one state, they may not need to be licensed in other states to transact surplus lines business, provided that the other states have similar reciprocity agreements in place.

This promotes efficiency and helps streamline the process for brokers working across state lines, making it easier for them to conduct business and ensuring that there is a level of consistency in how surplus lines are managed nationally. By facilitating this reciprocity, the NRRA supports the surplus lines market and aids in maintaining competition and responsiveness to policyholder needs.

In contrast, while the NAIC (National Association of Insurance Commissioners) provides recommendations and frameworks for insurance regulation, it does not have the authority to grant reciprocity directly. The Insurance Commissioner typically oversees the state’s insurance regulations and licensing but acts within the parameters set forth by acts like the NRRA. Syndicates, which are groups of individual underwriters that come together to share risk, do not grant recipro