What needs to be communicated if a substantial portion of insurance is eligible through authorized insurers?

When a substantial portion of insurance is eligible through authorized insurers, it is essential to notify policyholders of all available options and inform them when the risk is placed with a non-eligible insurer. This practice is important because it fosters transparency about the insurance options available to the insured, allowing them to make informed decisions about their coverage.

Communicating all options ensures that the insured understands that there are authorized insurers that may provide coverage for their risks, potentially at different price points or with varying terms and conditions. This openness can enhance the insured's confidence in the insurance process, as they feel empowered to choose the best option for their needs.

Additionally, informing the insured that their risk is placed with a non-eligible insurer is critical because it alerts them to the potential implications of that choice, such as a lack of certain protections guaranteed by state regulations, which may apply only to authorized insurers. This information can be crucial, as it may affect claims processes, availability of service, and other important factors that impact the insured's experience.

Therefore, the comprehensive communication of both the options available through authorized insurers and the nature of the coverage when dealing with non-eligible insurers meets regulatory expectations and serves the interests of the policyholders effectively.