Washington Surplus Lines Broker Practice Exam

Exempt commercial purchasers, as defined in surplus lines regulations, are typically large commercial entities that may not require the same level of regulatory oversight as smaller businesses. These purchasers are generally considered to have the ability and resources to assess their own insurance needs and risks.

The requirement to complete a Due Diligence statement stems from the recognition that while these entities have more capacity to evaluate and accommodate their insurance needs, there is still an obligation to ensure that appropriate measures are taken to inform themselves about the coverage being procured. The Due Diligence statement serves as a way to document that these purchasers have engaged in a thorough evaluation of their specific risk exposure and have made informed decisions regarding their insurance.

Thus, the assertion that exempt commercial purchasers must complete a Due Diligence statement is correct. This requirement helps to maintain a level of responsibility and accountability in the insurance placement process, even for those who are exempt from some regulatory requirements.