What must the surplus lines broker report to the department?

The correct response is that the surplus lines broker must report all gross premiums collected to the department. This requirement is critical because it provides the regulatory authority with an overview of the business volume conducted by the surplus lines broker. Reporting all gross premiums allows the department to monitor market practices, ensure compliance with relevant statutes, and assess the financial health and operations of surplus lines brokers.

In the surplus lines insurance market, where coverage is often taken from non-admitted insurers, maintaining transparency regarding the total amount of premiums collected is vital for regulatory oversight. This data helps identify trends, evaluate the performance of surplus lines markets, and facilitate effective regulation to protect consumers.

Understanding gross premiums in this context means capturing the total income generated through insurance policies sold, without adjustments for losses, deductions, or commissions. This contrasts with other options that focus on specific subsets of financial data which may not provide a complete picture of a broker's operations.