Which of the following is a characteristic of marine, inland navigation, and transportation insurance under surplus lines?

The choice indicating that marine, inland navigation, and transportation insurance under surplus lines does not need a certificate of authority is correct because surplus lines insurance often covers risks that are not easily placed in the standard market. Insurers providing these types of coverage are typically not licensed in the state where the policy is issued, thus they do not require a certificate of authority to operate.

This characteristic allows for greater flexibility in underwriting unique or high-risk situations that may not fit the conventional offerings of licensed insurers. Insurance in the surplus lines market is designed to facilitate coverage where traditional markets are reluctant to provide it, particularly for specialty or unusual risks in marine and transportation contexts.

In contrast, other characteristics, such as requiring special licensing or being subject to state rates, do not apply in this context. Surplus lines insurers operate independently of state-imposed rate regulations, which allows them to offer innovative solutions tailored to specific needs and circumstances in marine and transportation insurance.