Surplus Lines Authorization
One of the surplus lines regulations is that the insurer must be authorized in domiciliary jurisdiction.
However, the previous section states that suplus lines insurers are generally not allowed to write in their home state.
So a surplus lines insurer needs to get authorized in its home state, but still can't write there? Is that just authorization to exist?
Thanks!
Comments
In the Emmanuel wiki, I don't find it stated that surplus line insurers are not allowed to write in their home state. Did you see this in the Emmanuel text?
"Domestic Surplus Lines Insurance Companies (DSLIs)
Ian-the-Intern was surprised when he found out that a surplus lines carrier is generally not able to write surplus lines insurance in its state of domicile, but many states are changing their laws to allow for this. "
I find the following statement under Eligibility Requirements (p. 1.2) of the Emmanuel text:
The Model Act requires a foreign surplus lines insurer to be authorized in its domiciliary state to write the type of insurance that it writes as surplus lines coverage.
So, the requirement is for foreign insurers that want to write surplus lines in a state. It is not a question of requiring authorization from a domestic insurer, and then not allowing them to write surplus lines.
Then, in the DSLI section (p. 1.5), it is stated that insurers can't write surplus lines in their domiciliary state, but that many states are currently changing this.
Surplus lines are defined as those that domestic (licensed) insurers won't write. That's why it was not expected for a domestic insurer to write them. But apparently, that situation is changing.
So I'm imagining a Surplus Lines Insurer in DC that wants to write suplus covg in NY.
Based on p1.2, in order to write in NY as a foreign surplus lines insurer, the company must be authorized in DC to write surplus covg.
So the company gets authorized in DC, and can now write in NY, but (p 1.5) still can't write in DC?
This is usually the case, although the text says some states are changing this to enable them to write in the domiciliary state as well.
Thanks