Fall 2013 Surplus Lines Law Group Fall Meeting Electronic Documents State Materials in Alphabetical Order

AK: Notice of Placement List Hearing H13-04. A hearing will be held 10/3/13 to update the surplus lines placement list. Comments are due 10/1/13. http://www.commerce.state.ak.us/insurance/Insurance/programs/notices/H13-04.pdf

AK: HB146: Signed and eff. 7/1/13. Allows for proof of motor vehicle coverage to be displayed on a mobile device if from, among other things, a surplus lines broker. http://www.legis.state.ak.us/basis/get_bill_text.asp?hsid=HB0146Z&session=28

AL: Notice of 10/9/13 Hearing, including: This hearing involves the Amendment of Section 4 of Insurance Regulation No. 106 [Rule 482-1-106-.04], setting forth the rules for filing a bond by an insurer appointing a managing general agent. The proposed Amendment of Section 5 of Insurance Regulation No. 106 [Rule 482-1-106-.05], sets forth the rules for filing a copy of the audited financial statement of a managing general agent (MGA) by an insurer appointing the MGA. http://www.aldoi.gov/currentnewsitem.aspx?ID=815

AR: 2012 Annual Report of Department. It reports that there are 197 surplus lines insurers listed (134 foreign, 62 alien and one domestic – Kinsale Insurance Company). The rest of the report contains general information and financial information on companies other than surplus lines. http://insurance.arkansas.gov/index_htm_files/2012Annual.pdf

AR: Bulletin 10-2013: Claims Made Policies: Notices Required. This bulletin states that it applies to insurers licensed and authorized. The terms “licensed” and “authorized” are normally associated with admitted carriers. http://www.insurance.arkansas.gov/Legal/Bulletins/10-2013.pdf

AR: SB190: Act No. 1133. This bill corrects obsolete language regarding the “annual” statement to now indicate that the failure to file a “quarterly” statement is a reason for revoking a surplus lines broker’s license. http://www.arkleg.state.ar.us/assembly/2013/2013R/Acts/Act1133.pdf

AR: SB206: ACT 157: 2/7/13: PASSED, EFF 8/16/13. This bill is intended to clarify provisions relating to domestic surplus lines insurers and that taxation shall apply to the surplus lines broker in an Arkansas transaction. This was an item in first quarter newsletter, but here as a reminder of effective date. http://www.arkleg.state.ar.us/assembly/2013/2013R/Acts/Act157.pdf

AR: SB 339, ACT 355, approved 3/14/13: Sections 8 and 9. Ark. Code Ann. § 23-65-310(b) and (c) – Foreign and Alien Surplus Lines Insurers: The law currently requires foreign and alien surplus lines insurers to maintain a deposit of $100,000 in order to be on the Department’s approved list of 1 insurers. In accordance with the federal Non-Admitted and Reinsurance Reform Act of 2010 (NRRA) made effective on July 21, 2011, the states are restricted from imposing eligibility requirements on a foreign or alien company to be a non-admitted insurer in this state. This legislation removes the requirement of the deposit and other requirements. http://www.arkleg.state.ar.us/assembly/2013/2013R/Acts/Act355.pdf

AZ: Bulletin 2013-02: 2013 Legislation Summary. SB 1177 amends ARS § 20-465 which exempts insurers and insurance producers transacting “commercial insurance” from filing requirements for fees and services not customarily required in an insurance transaction. For the purposes of ARS § 20-465, defines “commercial insurance” as insurance that insures against the risks resulting from the responsibilities or activities of one or more businesses, including motor vehicle insurance policies insuring seven or more motor vehicles; HB 2358: insurance; continuing education requirements (Ch. 160); HB 2565: insurance; website posting of policies (Ch. 156). http://www.id.state.az.us/bulletin/2013-02.pdf

The Arizona Department of Insurance Order on P&C Rate and Form filing exemptions, Commercial non-cancellation restriction exemptions and Recognized Surplus Lines. Pursuant to the DOI hearing held on August 28, 2013, Director Germaine Marks ordered Notice No. 13A-071-INS, to supersede Docket No. 05A-108-INS, and to make certain determinations and issue orders related to: 1) The applicability of filing and approval requirements for property and casualty insurance products subject to AR.S. Title 20, Chapter 2, Article 4.1 (Exhibit A); 2) The applicability of cancellation or non-renewal restrictions to commercial property and casualty insurance products pursuant to AR.S. Title 20, Chapter 6, Article 14 (Exhibit B) ** no change **; 3) The recognition of surplus lines pursuant to AR.S. Title 20, Chapter 2, Article 5 (Exhibit C). Exhibit A is amended to add Collateral Protection Insurance and Pet Insurance to rates and forms exempted from having to be filed. Exhibit C is amended to define diligent effort as follows: "Diligent Effort" means having sought insurance for the same risk from at least three insurers authorized in this state to write the particular insurance coverage or type, class or kind of insurance. Arizona Revised Statutes ("ARS") § 20-401(4). Any portion of all of an insurance coverage designated ... as surplus lines may be procured from unauthorized insurers subject to the following conditions: 1. The insurance is procured through a surplus lines broker licensed in this state ... ,2. The insurance coverage is a recognized surplus line pursuant to section 20-409 or the insurance coverage is not procurable, after diligent effort has been made to procure coverage or the coverage has been procured to the full extent the insurers are willing to insure, and the placing of insurance with an unauthorized insurer is not for the purpose of securing advantages either as to premium rate or terms of the insurance contract. ARS §20-407(A).

Added to the Surplus Lines Export List: Fire and Allied Lines - Cyber or Electronic Media Risks; General Contractors, Owners, Developers, Paper Contractors or Subcontractors; Medical Marijuana Dispensaries/Grow Facilities

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General Liability - General Contractors, Owners, Developers, Paper Contractors or Subcontractors; Medical Marijuana Dispensaries/Grow Facilities; Solar Electric Installation/Generation - Commercial; Wind Power Electric Installation/Generation - Commercial

Inland Marine - Cyber or Electronic Media Risks Miscellaneous Special Lines - Monoline Crime for Cyber or Electronic Media Risks Professional Liability and Malpractice (Incl. E&O) - Cyber or Electronic Media Risks; Title Agent/Abstractors

AZ: SB 1177, Ch. 35: Signed 4/3/13. This bill modifies Section 20-407 regarding procurement from unauthorized insurers by removing the term “managing general agent” from the list of licensees who can make a submission to a surplus lines wholesaler. It also removes MGA from definition of “licensee” and makes other changes to MGA provisions. http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/51leg/1r/laws/0035.htm&Session_ID=1 10

AZ: HB 2358, Ch. 160 signed by Governor 4/30/13. This bill makes changes to the language of the continuing education laws. It removes the words “surplus lines broker” from definition of “licensee” in describing who must comply with the CE requirements. Licensee now means an individual insurance producer that holds a current license to transact insurance for a major line insurance as defined in section 20-281. Licensee does not include any business entity. http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/51leg/1r/laws/0160.htm&Session_ID=1 10

AZ: HB 2357: Ch.96, Approved by Governor 4/11/13. This law prohibits service fees on auto policies covering less than six vehicles. It also specifies that it does not apply to “commercial insurance” including commercial insurance covering auto policies insuring seven or more vehicles. http://www.azleg.gov/legtext/51leg/1r/laws/0096.pdf

CA: SLA: CDOI Fee Increases: Bulletin 1285, 5/6/13. Fees go up by 10% across the board. The SLA bulletin contains a link to the schedule of fees. http://www.slacal.org/publications/bulletins/1200_series/1285.pdf http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss- opinion/upload/FeeSchedule2013-13.pdf

CA: SLA: Suggested broker procedures for change of carrier. While the events precipitating the suggestions from the SLA are company specific, these procedures should be considered by brokers for any change of carrier. The link below is to the general CASLA page, see updates, A.M. Best recently downgraded Century Surety Company and Meadowbrook Insurance Group from A- to B++, Click here for more information. Where it says “click here,” click there. http://www.slacal.org/

CA: SLA procedures regarding change of carrier regarding the downgrade of Founders Insurance Company was recently posted to the SLA web site.

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CA: AB83: Introduced 1/10/13, 06/27/13 ordered to inactive file in Senate. This bill modifies taxation and collection provisions that apply to surplus lines brokers by adding provisions relating to Medi-Cal policies. Status page link follows. http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_0051- 0100/ab_83_bill_20130613_amended_sen_v98.pdf http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_0051-0100/ab_83_bill_20130905_status.html

CA: AB1053: 5/30/13: passed Assembly, in Senate Insurance Committee. This bill would change the definition of industrial insured by increasing to $50,000 the aggregate annual premiums required to qualify as an industrial insured for insurance for all risks other than workers’ compensation and health coverage. http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1051- 1100/ab_1053_bill_20130222_introduced.pdf

CA: AB1236: Ch. 114, signed 8/16/13. Allows surplus lines to write insurance required for a contractor’s state license. “Any policy or policies secured to satisfy the requirements of this section shall be written by an insurer or insurers duly licensed by this state or an eligible surplus line insurer, with the insurance procured pursuant to Section 1765.1 of the Insurance Code, and may be in a form reasonably available in the commercial insurance market and may be subject to those terms, conditions, exclusions, and endorsements that are typically contained in those policies. A policy or policies of insurance maintained pursuant to this section may be subject to a deductible or self-insured retention.” http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1201-1250/ab_1236_bill_20130816_chaptered.pdf

CA: AB1395: Introduced 3/4/13, passed Assembly, in Sen. Cmte 5/23/13, link is as amended in assembly 4/2/13. This bill would delete the provision requiring a surplus lines broker to file a return showing that his or her return premiums exceeded his or her gross premiums even when no payment is payable by the broker. Also, if no payment is payable by the broker, the Commissioner may waive or modify the requirements by issuance of a notice published on the Department’s website. There is some indication that the CDI believes they can take care of the zero premium filing issue administratively so the bill might not move forward if the CDI believes that they can achieve a similar result without the legislation http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1351- 1400/ab_1395_bill_20130402_amended_asm_v98.pdf

CA: SB662 Financial responsibility insurance required for pest control operators. Signed 9/6/13. Surplus lines coverage may be utilized for this purpose. http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0651-0700/sb_662_bill_20130906_chaptered.pdf

CA: Bulletin # 1288 Sept. 25, 2013 RE: California LASLI Filing Requirements Guide for Surplus Line Insurers (Guide). This bulletin includes the 2013 Guide issued by the California Department of Insurance (CDI) for nonadmitted insurers who wish to remain on or be added to the List of Approved Surplus Line Insurers (LASLI). The LASLI is a voluntary list of nonadmitted insurers that the CDI has approved for use by surplus line brokers for placement of risks when California is the insured’s home state. The filing requirements are in accordance with California Insurance Code §1765.2. You may also

4 obtain the Guide from the SLA website http://www.slacal.org/carrier_info/cr_california_lasli_filing_requirements.html. The filing requirements for 2013 are essentially the same as those in the prior year, except for the filing fees.

CA: ELLSWORTH, v. U.S. BANK, N.A., and AMERICAN SECURITY INSURANCE COMPANY, No. C 12- 02506 LB, US DISTRICT COURT FOR THE NORTHERN DISTRICT OF CA, SAN FRANCISCO DIVISION Decided 12/11/12. This case involves the denial of a motion to dismiss. Plaintiff complained about, among other things, backdating of forced-placed flood insurance and kickbacks to the insurer. The Mortgage included a provision that allowed the bank, in its discretion, to require and forced-placed flood insurance. The claims were found to be at their core not about fees (had they been, they would have been preempted by the National Bank Act) but about practices that are not preempted: (a) kickbacks to U.S. Bank in that "U.S. Bank and/or its affiliates received a kickback or commission from ASIC on this lender-placed coverage" and "U.S. Bank did not subtract this commission from the premium cost, which was passed along in full to Plaintiff;" and (b) backdating of insurance. Additionally, the court found no preemption by the bank’s real estate lending powers as claimed by the bank’s position that charging kickbacks is "in accord with federally-authorized powers in protecting its interest in the property.” Nor were the claims about backdated insurance coverage interfering with the bank’s real estate lending powers. http://law.justia.com/cases/federal/district-courts/california/candce/3:2012cv02506/255107/80

CA: KAUAI SCUBA CENTER, INC., v. PADI AMERICAS, INC., et al., No. 11-56346 US COURT OF APPEALS FOR THE NINTH CIRCUIT 5/3/13 Filed. The insured paid annual premiums and was named as an additional insured on master policies between insurer and the sponsor of risk purchasing group (PADI). The Insured alleged that under the master policies in effect, the association, not the surplus lines insurer, was required to pay the first $300,000 in covered losses. The policy language, however, made it clear that only the physical damage coverage, not the CGL coverage, required the association to pay the first part of covered claims. The language also made it clear that the part the association was required to pay was a $300,000 annual aggregate of the claims of all additional insureds. The insured had received $88,000 in payment for a fire damage claim under its physical damage policy. That is the only claim the insured made under the policies. There is no dispute about the payment for that claim.

The insured class action alleged that the defendants misrepresented the insurance by failing to disclose PADI’s payment obligation. In its first amended complaint, the insured alleged damages on the theory that, as a result, coverage was "illusory." In its second amended complaint, Kauai alleged that a policy imposing significant claim-payment responsibility on PADI, the named insured, as opposed to the insurer, was worth less than a policy without such a provision, and that Kauai had overpaid its premiums as a result. Dismissal upheld upon appeal. http://law.justia.com/cases/federal/appellate-courts/ca9/11-56346/11-56346-2013-05-03.html

CT: Bulletin IC-33 6/25/13. This bulletin provides that in the event of a significant weather-related event or other disaster for which the Governor declares a state of emergency in Connecticut, Claim Processing shall be pursuant to the standards in the bulletin and premium payments shall be suspended. http://www.ct.gov/cid/lib/cid/Bulletin_IC-33_June_2013.pdf

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CT: Bulletin SL-4: 7/25/13. Modifies procedures so to comply with Public Act 13-171(below HB6379) which provides that surplus lines broker can file with the Commissioner signed written statements instead of affidavits. A copy of the form is attached to the bulletin (and link below). The bulletin also restates the provisions as to what is a diligent effort. http://www.ct.gov/cid/lib/cid/Bulletin_SL- 4_New_Procedures_for_Filing_Surplus_Lines_Taxes_and_Affidavits.pdf

CT: Technical Changes. Posted 9/9/13. Surplus lines sections are included. The entire document the link, but the surplus lines provisions provide: Sec. 38a-707-1. Service Fees Properly licensed [insurance agents and brokers] producers organizing business in this state may charge service fees to their clients in accordance with the schedules shown in sections 38a-707-2 to 38a-707-8, inclusive, of the Regulations of Connecticut State Agencies. In addition to the scheduled fees a producer or surplus lines broker may charge as reimbursement, any moneys expended by him for any (l) inspection report fees, (2) motor vehicle department reports, (3) policy reports, (4) credit card service fees, (5) regulatory fees from other jurisdictions, such as licensing fees, necessary for the placement of Connecticut risks with out-of-state exposure, (6) costs for overnight mail, or (7) telegrams or telephone calls necessary for the placement of the risk under consideration.

Sec. 2 Section 38a-8-76(a) (1 )(C) of the Regulations of Connecticut State Agencies is amended to read as follows: (C) "Licensee" means individuals licensed by the Insurance Commissioner as [insurance agents, insurance brokers] producers, public adjusters, temporary agents, casualty claim adjusters, [excess line] surplus lines brokers, fraternal agents, motor vehicle physical damage appraisers, and certified insurance consultants. http://www.sots.ct.gov/sots/lib/sots/regulations/recentlyadopted/ecopy_reg_6132.pdf

CT: HB6379 6/6/13 Public act 13-171, eff. 10/1/13. This bill replaces affidavits with signed statements setting forth facts showing that the licensee and insured were unable after a diligent effort to procure, from any authorized insurer or insurers, the full amount of insurance required to protect the interest of such insured. It also requires the type of policy, and if such policy is for real property, the location of such property. The licensee shall file such signed statements in electronic format with the Commissioner on 2/15, 5/15, 8/15 and 11/15 of each year. http://www.cga.ct.gov/2013/ACT/PA/2013PA-00171-R00HB-06379-PA.htm

DE: Domestic/Foreign Insurers Bulletin No. 66, 8/22/13. Information and instructions for the 2013 Homeowners’ Insurance Rate Survey. Completion of this survey by 9/30/13 is required by all insurance companies providing homeowners insurance coverage in Delaware with more than .01 percent market share in homeowner multiple peril line. It refers to the bulletin from the 2007 survey which applied to licensed carriers. http://delawareinsurance.gov/departments/documents/bulletins/DomesticForeignInsurersBulletin66. pdf

DE: HB213 intro 6/27/13. This bill increases the premium tax on surplus lines from 2% to 3%. The proceeds from the increase will be used to fund medical coverage for retired State, County, and

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Municipal police officers and firefighters. The retirees must be retired from the State Police Pension plan or the County/Municipal Police/Firefighters Pension plan. http://www.legis.delaware.gov/LIS/lis147.nsf/vwLegislation/HB+213/$file/legis.html?open

FL: Article: Florida Insurance Consumer Advocate’s Homeowners Working Group Continues Review of Policy and Claims Bill of Rights at August 19 Meeting. http://cftlawnews.com/index.php?cmd=article&id=9574

FL: 9/25/13. Hearing of the FL House Insurance and Banking Subcommittee was held. Surplus lines was a topic. The subject of seasoning for SL licenses was discussed. http://www.flhouse.gov/Sections/Committees/meetingnotice.aspx?MeetingId=9545&SessionId=75&C ommitteeId=2725 Related Article: http://www.cftnews.com/index.php?cmd=article&id=9656

FL: FSLSO: eNews: 15.10. On 9/26/13 there was a Member's Forum, titled "Vital Signs – Is Your Insurer on Life Support?" At the time of this newsletter compilation, the link below contained a link for registration, but there may be an online version to view after the date of the forum. Also there is a CE course 10/24 in Orlando. That link is on the link below. Contact the FSLSO. http://www.fslso.com/publications/enews/archived.aspx?itemID=273

FL: FSLSO Advisor: 2nd Quarter 2013. Streamlined SLIP and other Florida Surplus Lines information. http://www.fslso.com/publications/advisor/pdf/Q2.Advisor.2013.pdf

FL: FSLSO: Risk Purchasing Groups: SL TAX: Eff. 8/22/13. All surplus lines agents placing coverage on behalf of an RPG shall submit taxes due to FSLSO. http://www.fslso.com/publications/press/FSLSO/rpg.memo.pdf

FL: FSLSO. Board of Governors meeting. All persons are invited. 10/10/13, 9 a.m., 1441 Maclay Commerce Drive, Suite 200, Tallahassee, FL 32312. General business matters to be presented to the Board. A copy of the agenda may be obtained by contacting Georgie Barrett via email at [email protected].

FL: 2013 session: SB 64: Commercial Parasailing: Financial responsibility. Died in committee 5/3/13. This bill would have required insurance from an insurer “licensed…or approved by the OIR:” Section 3 of this bill would have provided that the owner of a vessel engaged in commercial parasailing may not offer or provide for consideration any parasailing activity unless the owner first obtains and carries in full force and effect an insurance policy from an insurance carrier licensed in this state or approved by the Office of Insurance Regulation. http://www.flsenate.gov/Session/Bill/2013/0064/BillText/Filed/PDF

FL: HB 157 PASSED. Eff. 7/1/13: This bill allows for electronic transmission of policies. Note that these provisions appear in Chapter 627 and would not appear to apply to surplus lines because 626.913 provides that (4) Except as may be specifically stated to apply to surplus lines insurers, the provisions of chapter 627 do not apply to surplus lines insurance authorized under ss. 626.913-626.937, the Surplus Lines Law. 7 http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h0157er.docx&Docu mentType=Bill&BillNumber=0157&Session=2013

FL: HB 223 Eff. 7/1/13. This bill authorized the posting of specified types of insurance policies and endorsements on an insurer's Internet website in lieu of mailing or delivery to the insured if the insurer complies with certain conditions. Note that these provisions appear in Chapter 627 and chapter 627 does not apply to surplus lines insurance unless they specifically state that they apply to surplus lines insurance. http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h0223er.docx&Docu mentType=Bill&BillNumber=0223&Session=2013

FL: Omnibus insurance bills: SB 1046, HB 635: This bill failed to pass. Among other provisions, this bill would have amended Florida law by: • deleting provisions requiring a surplus lines agent to file a quarterly affidavit with the Florida Surplus Lines Service Office; • revising the due date of surplus lines tax; • providing that certain persons who are not residents of this state must be licensed and appointed as nonresident surplus lines agents in this state in order to engage in specified activities with respect to servicing insurance contracts, certificates, or agreements for purchasing or risk retention groups; • deleting a fidelity bond requirement applicable to certain nonresident agents who are licensed as surplus lines agents in another state. For convenience, bill page link is below also. http://www.flsenate.gov/Session/Bill/2013/0635/BillText/c2/PDF http://www.flsenate.gov/Session/Bill/2013/0635 SB 1046, committee substitute 4/19/13 as committee and bill page. http://www.flsenate.gov/Session/Bill/2013/1046/BillText/c1/PDF http://www.flsenate.gov/Session/Bill/2013/1046

FL: SB468 As engrossed. Explanation courtesy of FSLSO: Senate Bill 468 relative to property and casualty insurance rates, fees and forms became effective July 1, 2013. SB 468 expands the number of commercial lines exempt from the rate filing and review requirements of F.S. 627.062(2)(a) as it relates to the diligent effort exemption to include: • Medical malpractice for a facility that is not a hospital licensed under chapter 395, a nursing home licensed under part II of chapter 400, or an assisted living facility licensed under part I of chapter 429. • Medical malpractice for a health care practitioner who is not a dentist licensed under chapter 466, a physician licensed under chapter 458, an osteopathic physician licensed under chapter 459, a chiropractic physician licensed under chapter 460, a podiatric physician licensed under chapter 461, a pharmacist licensed under chapter 465, or a pharmacy technician registered under chapter 465. Under Florida Statute 626.916, Eligibility to Export, these lines would no longer be subject to the Diligent Effort requirement, but would require an insured to sign a Disclosure Statement. FSLSO has modified its diligent effort/disclosure statement webpage to include these additions. For information concerning the diligent effort requirement and the disclosure statement, please visit the FSLSO web

8 site: http://www.fslso.com/publications/documents/1087.aspx These statutory changes will go into effect on July 1, 2013. http://www.flsenate.gov/Session/Bill/2013/0468/BillText/er/PDF

FL: SB 1770: PASSED. This bill addresses property coverage and Citizens policies. Surplus lines was not allowed to participate in the clearinghouse (to be established on 1/1/14) due to unregulated rates. The bill is 100 pages long and to view specific surplus lines laws open the link and search the bill for “surplus lines.” 4/11/13: Engrossed version and bill page link below, eff. 7/1/13. http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_s1770er.DOCX&Docu mentType=Bill&BillNumber=1770&Session=2013

FL: 5/16/13 Forced-Placed Coverage: Article: Miami law firms reach $19M settlement with Wells Fargo over forced-placed insurance. South Florida Business Journal: http://www.bizjournals.com/southflorida/news/2013/05/16/miami-law-firms-reach-19m- settlement.html OIR Media Advisory of Hearing on forced-placed coverage rate hearing 5/9/13: http://www.floir.com/PressReleases/viewmediarelease.aspx?id=2006 OIR Link to webpage on forced-placed: http://www.floir.com/Sections/PandC/lenderplacedincoverage.aspx Related articles: http://www.theledger.com/article/20130513/NEWS/305135032/1374?Title=Groups-Call-for-Lower- Rates-in-Lender-Placed-Insurance Text and video related articles: http://www.wctv.tv/home/headlines/Public-Hearing-Held-for-Lender-Placed-Insurance-Companies- 207314081.html

FSLSO: Third quarter 2013 Advisor. Includes article on restricting zero premium transactions. FSLSO has allowed, but will soon prohibit, transactions to be filed with a zero or no numeric value in the premium field. http://www.fslso.com/publications/advisor/pdf/Q3.Advisor.2013.pdf

FL: Canal Indem. Co. v. Margaretville of NSB, Inc., 2013 U.S. Dist. LEXIS 93658. Plaintiff sought to rescind the CGL Policy it issued pursuant to the remedy provided in Florida Statute § 627.409, based upon Plaintiff's contention that defendant made material misrepresentations on the application for insurance. Defendant insists that the remedy of rescission under section 627.409 is not available to surplus lines insurers, such as Plaintiff. Plaintiff contends that this statutory remedy is available. The Court found that rescission pursuant to Fla. Stat. § 627.409 is unavailable, and Plaintiff is not entitled to summary judgment. Common law rescission may be available. http://docs.justia.com/cases/federal/district- courts/florida/flmdce/6:2011cv02001/266325/112/0.pdf?ts=1376380861

GA: SB140: As Passed 5/6/13. Act 214 eff. 7/1/13. This bill requires warranty and service agreements to be backed by insurance. This bill does not apply to a warranty issued by an authorized insurer and or surplus lines insurer. http://www.legis.ga.gov/Legislation/20132014/137110.pdf

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GA: 120-2-103: eff. 5/22/13: Note that section .03 “applicability” is very broad. The rule requires non- standard certificates of insurance to be filed, which would be unusual for surplus lines. The extent to which it might be applied to surplus lines insurers is unclear. It states that it applies to insurers as used in § 33-7-3 (casualty insurance) and 33-7-6 (property insurance). A strong argument could be made that 33-7-6 does not apply to a surplus lines insurer because it provides that: “this provision shall not apply to an agreement underwritten by an insurer licensed to transact insurance in this state, either directly or through a reinsurance contract or, without regard to the requirement that the insurance cannot be obtained from an insurer authorized to do business in this state as required by Code Section 33-5-21, to an agreement underwritten by a surplus lines insurer which has not been rejected by the Commissioner for such purpose.” http://rules.sos.state.ga.us/cgi- bin/page.cgi?g=COMPTROLLER_GENERAL%2FRULES_OF_COMPTROLLER_GENERAL_OFFICE_OF_COM MISSIONER_OF_INSURANCE%2FREGULATIONS_REGARDING_AGENTS__SUBAGENTS__COUNSELORS__ ADJUSTERS__SURPLUS_LINES_BROKERS__AND_AGENCIES%2Findex.html&d=1

HI: Electronic Transmission of Documents working group: 7/22/13. Agenda for 7/31/13 meeting minutes of that meeting and upcoming meeting and minutes: 8/19/13. http://hawaii.gov/dcca/ins/insurance-verification-working-group/SCR159_SD1.pdf http://hawaii.gov/dcca/ins/electronic-insurance-notices-and-documents-working-group/08-19- 13_Minutes.pdf Minutes of the 9/3/13 meeting: http://hawaii.gov/dcca/ins/electronic-insurance-notices-and-documents-working-group/Minutes_09- 03-13.pdf Agenda for 9/16/13 meeting: http://hawaii.gov/dcca/ins/electronic-insurance-notices-and-documents-working-group/09-16- 13_Agenda.pdf A general link to the document dated 8/4 is here: http://hawaii.gov/dcca/ins/whats-new-ins/RSS) http://hawaii.gov/dcca/ins/insurance-verification-working-group/Wed_07-31-13_Agenda.pdf http://hawaii.gov/dcca/ins/electronic-insurance-notices-and-documents-working-group/07-31- 13_Minutes.pdf

IA: DOI announces rescission of a number of bulletins, specifically 90-6, Irregularities in Surplus Lines and Risk Retention activities. This bulletin, dated 8/30/90 related to placement of business and affidavits. It stated that a person placing business for an RRG or RPG must have the appropriate license, that the person who PLACES the business must file the affidavit, and that business placed with nonadmitted insurers must be a licensed resident agent. Other provisions relate to RRGs. Notice of 7/25/13 public forum followed by link to bulletins. http://www.iid.state.ia.us/sites/default/files/hearings/2013/07/03/public_forum_notice_bulletin_resc issions_pdf_10612.pdf http://www.iid.state.ia.us/sites/default/files/hearings/2013/07/03/list_of_proposed_bulletin_rescissi ons_pdf_20635.pdf

ID: Info Page/News Release 6/17/13 INSURANCE DEPARTMENT LAUNCHES PORTABLE ELECTRONICS LICENSE. Starting July 1, 2013, the Idaho Department of Insurance will begin licensing businesses to sell 10 portable electronics insurance to cover the repair or replacement of portable electronic devices such as cell phones and tablets and their accessories. New vendors must be licensed before selling this insurance. The insurance does not include service contracts or warranties. The Department has created an information page on their website with information for vendors – including a list of frequently asked questions. http://www.doi.idaho.gov/producer/pe/default.aspx. Note that 41-1082 (of the Idaho code from that web link) could be read to exclude a surplus lines insurer from acting as a “supervising entity.” Section 7 defines "supervising entity" as a business entity that is a licensed insurer or insurance producer that is authorized by an insurer to supervise the administration of a portable electronics insurance program. http://www.doi.idaho.gov/press/text%20version/Portable%20Electronics.aspx

IL: SB1730: Public Act 098-0158 8/2/13. This bill creates liens for failure to make payments as required by the code to the DOI. This bill would apply to surplus lines brokers. The bill provides that the Department shall have a lien for the taxes, fees, charges, fines, penalties, interest, other charges, imposed or assessed pursuant to this Code, upon all the real and personal property of any company or person to whom the assessment or final order has been issued or whenever a tax return is filed without payment of the tax or penalty shown therein to be due, including all such property of the company or person acquired after receipt of the assessment, issuance of the order, or filing of the return. http://ilga.gov/legislation/publicacts/98/PDF/098-0158.pdf

IL: Company Bulletin 2013-11: IL Domestic Insurer: Board member Residency Requirement and report of compensation 7/22/13. http://insurance.illinois.gov/cb/2013/cb2013-11.pdf

IN: HB 1322: PASSED: Act 1322: EFFECTIVE JULY 1, 2013: Chapter 42. This bill applies to a certificate of insurance that is issued in connection with a contract related to property, operations, or risks located in Indiana, regardless of the location of the policyholder, insurer, insurance producer, or person that requests or requires the issuance of the certificate of insurance. It prohibits misleading certificates and provides that the certificate cannot alter or amend the policy. It indicates that the term “insurer” is defined in 27-1-2-3 the term "insurer" means a company, firm, partnership, association, order, society or system making any kind or kinds of insurance and shall include associations operating as Lloyds, reciprocal or inter-insurers, or individual underwriters.” http://www.in.gov/legislative/bills/2013/PDF/HE/HE1322.1.pdf

KS: Eff. 7/1/13: Electronic Notice and Document Act (Act), which allows the use of electronic notices and documents for sending insurance notices and documents. In order to send electronic notices and documents to another party, the bill requires the insurer to obtain the consent of the other party. http://www.kslegislature.org/li/b2013_14/measures/documents/hb2107_enrolled.pdf Summary: http://www.kslegislature.org/li/b2013_14/measures/documents/summary_hb_2107_2013.pdf

KY: Bulletin 2013-01: Local Government Premium Taxes. This bulletin describes the surplus lines broker premium tax filing requirements under KRS 304.10-180(1)(c). The 2013-2014 tax schedule applies only to premiums received after July 1, 2013, through June 30, 2014. http://insurance.ky.gov/Documents/LGPTBulletin13-01040413.pdf 11

LA: Article re: Federal flood and Louisiana’s working cost. http://www.nola.com/politics/index.ssf/2013/09/biggert_waters_flood_louisiana.html

LA: HB 414, Act 283, eff. 6/14/13 authorizes agency fees on health and accident insurance policies. http://www.legis.la.gov/legis/ViewDocument.aspx?d=857454

LA: HB543, Act 203 6/10/13. This was a significant bill that included amendments to R.S. 22:431, 432, 433, 435, 436, and 438, in the surplus lines code. This bill authorizes the placement of insurance with a surplus lines insurer without regard to the availability of authorized insurance, making Louisiana one of the few states to abolish the diligent search requirement. It also makes changes to surplus lines notices, describes the current capital requirements, surplus requirements, bond requirements, and deposit requirements. It provides that the list of surplus lines insurers maintained by the Commissioner of Insurance is prima facie evidence of insurer eligibility and provides that an insurer can be removed from that list. It also provides for certain notices to personal lines policyholders regarding placement of surplus lines insurance. http://www.legis.la.gov/legis/ViewDocument.aspx?d=857103

MA: Bulletin 2013-03; 4/23/13. This bulletin establishes procedures related to insurance claims resulting from the explosions occurring in Boston on April 15, 2013 and Related Events. It also issues underwriting restrictions and premium payment guidelines. It states that it applies to “all insurers licensed or authorized to operate.” The terms “licensed” and “authorized” normally are associated with admitted carriers. http://www.mass.gov/ocabr/business/insurance/doi-regulatory-info/doi-regulatory-bulletins/2013- doi-bulletins/bulletin-2013-03.html

MD: Bulletin 13-26 Fraud Data reporting. For required entities, may be done electronically. Authorizing statute applies to authorized companies: 27-803(a) (1) Each authorized insurer shall institute and maintain an insurance antifraud plan. http://www.mdinsurance.state.md.us/sa/docs/documents/insurer/bulletins/bulletin13-26- onlinefdr.pdf

MD: Bulletin 13-18, 6/13/13: The bulletin is addressed to all authorized insurers writing homeowners insurance and the JIA. The bulletin mentions a study of the Homeowner’s Insurance Anti Concurrent Causation Clause pursuant to CH. 383, Acts 2013 (HB695 as enrolled, link below). Although there were some instances where the department appeared to be applying some personal lines bulletins to Surplus Lines, it is not likely the department considers this bulletin to apply to a surplus lines insurer because the term “authorized insurer” is not normally associated with a surplus lines insurer. http://www.mdinsurance.state.md.us/sa/docs/documents/insurer/bulletins/bulletin-13-18- concurrent.causation.clause.pdf http://mgaleg.maryland.gov/2013RS/Chapters_noln/CH_383_hb0695e.pdf

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MI: Bulletin 2013-14-INS: Annual CPI maximum fee adjustment: Eff. 6/1/13-5/31/14. The maximum fee a surplus lines licensee may charge for costs, without application to the Director, is $58.00. http://www.michigan.gov/documents/difs/Bulletin_2013-14-INS_422835_7.pdf?20130603101659

MN: HB647 amended 4/2/13: See: Subd. 7. Fraud assessment. This bill provides that each insurer authorized to sell insurance in the state of Minnesota, including surplus lines carriers, and having Minnesota earned premium the previous calendar year shall remit an assessment to the commissioner for deposit in the insurance fraud prevention account on or before June 1 of each year. The amount of the assessment shall be based on the insurer's total assets and on the insurer's total written Minnesota premium, for the preceding fiscal year, as reported pursuant to section 60A.13. The assessment is calculated to be an amount up to the following: Total Assets Assessment Less than $100,000,000 $ 200 $100,000,000 to $1,000,000,000 $ 750 Over $1,000,000,000 $ 2,000 Minnesota Written Premium Assessment Less than $10,000,000 $ 200 $10,000,000 to $100,000,000 $ 750 Over $100,000,000 $ 2,000 Bill page, second amended text as engrossed are links below. https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF647&ssn=0&y=2013 http://wdoc.house.leg.state.mn.us/leg/LS88/HF0647.2.pdf

MO: Domestic Surplus Lines Insurer: 8/9/13. There is a proposal being discussed to amend 384.015 to allow for a MO domestic SL insurer. No link at the current time.

MO: HB322: 7/9/13 approved by Governor. Evidence of Insurance on Electronic Device: This bill provides that a photocopy or an image displayed on a mobile electronic device that contains the policy information must be satisfactory evidence of insurance in lieu of an insurance identification card. Second link is a DOI press release on same. http://www.house.mo.gov/billtracking/bills131/sumpdf/HB0322T.pdf http://insurance.mo.gov/news/2013/Consumers_can_go_paperless_in_Missouri_when_showing_pro of_of_auto_insurance

MT: Ch. 303: Eff. 7/1/13: Establishes Certificates of Insurance Model Act. This act basically requires non-standard certificates to be filed. "Insurance producer" means a person required to be licensed under the laws of this state to sell, solicit, or negotiate property or casualty insurance. "Insurer" means an organization that issues property or casualty insurance. http://leg.mt.gov/bills/2013/sesslaws/ch0303.pdf

ND: HB 1181: Domestic Surplus Lines Insurer: ENACTED. Allows a North Dakota domestic insurer to be designated a domestic surplus lines insurer if: a. The insurer possesses a policyholder surplus of at least fifteen million dollars; b. The designation is in compliance with a resolution of the insurer's board of directors; and c. The commissioner has provided written approval of the designation. 13 http://www.legis.nd.gov/assembly/63-2013/documents/13-0408-04000.pdf?20130430101455

ND: Resident producer background checks. Beginning 9/1/13, anyone applying for a ND resident insurance agent license must undergo a criminal background check, including fingerprinting. This does not apply to individuals renewing a license or individuals who apply for a license within 12 months after their license was cancelled or expired, unless the license was suspended or revoked. This makes a total of 26 states conducting such checks on individuals applying for resident agent licenses. Most states do not have searchable online court records, making it difficult to obtain information about an applicant’s history. Contact Producer Licensing Division Director Kelvin Zimmer at 701-328-2440 [email protected]. http://www.legis.nd.gov/assembly/63-2013/documents/13-8251-03000.pdf?20130717104209

NM: SB312: Eff. 7/1/13 See Section 2. This bill requires the use of standard certificates of insurance or filed certificate forms. An individual insurer shall not be required to file a certificate of insurance form if that form is the current edition of a standard certificate of insurance form that is promulgated by the association for cooperative operations research and or the insurance services office and that is filed with and approved by the superintendent. It applies to all certificates of insurance issued in connection with property, operations or risks in New Mexico. It defines “Insurance producer" as a person required to be licensed pursuant to the laws of New Mexico to sell, solicit or negotiate property or casualty insurance. http://www.nmlegis.gov/Sessions/13%20Regular/final/SB0312.pdf

NJ: Bulletin 13-03 Implementation of Surplus Lines Automation Suite (SLAS). Producers and Insurers. SLAS was anticipated to be operational on or about April 8, 2013 and available for filing first quarter 2013 data due by May 15, 2013 and for quarterly filings thereafter. The SLAS will provide a web-based system by which required data may be entered or uploaded by the filer. The Department intends to propose amendments to N.J.A.C. 11:19-3 in the near future to refer to the SLAS. Producers with surplus lines authority are encouraged to avail themselves of the SLAS filing system, pending the adoption of the rules. Filings by surplus lines insurers under SLAS will not be submitted until April 1, 2014 reflecting 2013 data. The bulletin stated that surplus lines insurers may wish to visit the SLAS website set forth below to become familiar with its requirements. Instructions on filing and using the SLAS may be viewed at: http://slipinfo.njslasuite.com/ Any questions on this Bulletin may be directed njslasuite.com/ by either email or telephone to: E-mail: [email protected] Telephone: (609) 292-7272 x 50268 http://www.state.nj.us/dobi/bulletins/blt13_03.pdf

NJ: IMPLEMENTATION OF A MEDIATION PROGRAM TO AID IN RESOLUTION OF CLAIMS RELATED TO STORM SANDY, Bulletins 13-07, 13-08. These bulletins provide that surplus lines insurers and risk retention groups may elect whether or not to participate on a case-by-case basis. http://www.state.nj.us/dobi/bulletins/blt13_07.pdf http://www.state.nj.us/dobi/bulletins/blt13_08.pdf

NV: Bulletin 13-004 6/5/13. This bulletin addresses legislative changes including: • NRRA compliance,

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• electronic filings with the Nevada Stamping Office, • removal of outdated and conflicting provisions, • indicates that the eligibility provisions have been revised, • indicates that a diligent effort by broker is required only if Nevada is the home state, • indicates that no diligent search is required for exempt commercial purchasers, • indicates that a diligent effort to determine the financial solvency of a foreign or alien nonadmitted insurer is required if Nevada is the home state of the insured and the insurer is not listed on the quarterly listing of alien insurers maintained by the NAIC International Insurers Department (although it likely did not intend to mention “foreign” insurers). The bulletin states that a placement is not considered to be independently procured insurance if there is a broker involved. http://doi.nv.gov/uploadedFiles/doi.nv.gov/Content/News_and_Notices/Bulletins/Bulletin%2013- 004.pdf

NV: AB 425, Chapter 541, 6/12/13 Approved by Governor. Relates to exchange enrollment facilitators. A facilitator may not concurrently hold a license as a producer of insurance, an insurance consultant or a surplus lines broker in any line (nor be affiliated therewith). http://www.leg.state.nv.us/Session/77th2013/Bills/AB/AB425_EN.pdf

NY: 9/19/13 Forced-Placed. New York proposes new rules for forced-placed insurers who shall: • not issue forced-placed insurance on mortgaged property serviced by an affiliated bank or service • not pay commissions to a bank or servicer or a person or entity affiliated with a bank or servicer on forced-placed insurance policies obtained by the servicer. • not reinsure forced-placed insurance policies with a person or entity affiliated with the banks or servicer that obtained the policies. • not pay contingent commissions based on underwriting profitability or loss ratios. • not provide free or below-cost, outsourced services to banks, servicers or their affiliates. • not make any payments, including but not limited to the payment of expenses, to servicers, lenders, or their affiliates in connection with securing business. • provide adequate notification requirements so homeowners understand their responsibility to maintain homeowners insurance, and that they may purchase voluntary coverage at any time. • not exceed the maximum amount of forced-placed insurance coverage on New York properties. • refund all forced-placed premiums for any period when there is overlapping voluntary coverage; • Forced-placed insurers are required to regularly inform the Department of loss ratios actually experienced and re-file rates when actual loss ratios are below 40 percent. Governor’s press release followed by proposed rules: http://www.governor.ny.gov/press/09192013-insurance-industry-reforms http://www.dfs.ny.gov/insurance/r_prop/rp202t.pdf Related article: http://news.yahoo.com/york-proposes-rules-force-placed-insurance-152005656-- sector.html;_ylt=A2KJ3CV.MjxSGzAAW_fQtDMD

NY: AB 5694: 4/30/13 Signed, Ch. 20. Extends the effectiveness of provisions of law establishing an excess line advisory organization until 2019. http://assembly.state.ny.us/leg/?default_fld=&bn=A05694&term=2013&Text=Y

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NY: PROPOSED FOURTEENTH AMENDMENT TO INSURANCE REGULATION 41 (11 NYCRR PART 27). 7/17/13. This amendment revises some insurer eligibility provisions. No hearing is scheduled but comments may be sent (see second link below) within 45 days of publication. The Department amended Section 27.13 to: (1) clarify that the requirements set forth in this section apply when the insured's home state is New York; (2) remove certain information from the list of information that an excess line broker must obtain and review prior to placing insurance with an unauthorized insurer; and (3) delete the prohibition against an excess line broker placing business with an excess line insurer unless the insurer has filed with the Superintendent a current listing that sets forth certain individual policy details. The Department repealed current Section 27.14 and added a new Section 27.14 entitled, "Duty of Unauthorized Insurers," which would affirmatively require an excess line insurer to file electronically with the Superintendent a current listing that sets forth certain individual policy details. http://www.dfs.ny.gov/insurance/r_prop/rp41a14t.pdf http://www.dfs.ny.gov/insurance/r_prop/rp41a14f.pdf http://www.dfs.ny.gov/insurance/r_prop/rp41a14u.htm

NY: ELANY: Bulletin 2013-26, 6/19/13. REQUEST FOR ADDITIONAL COVERAGES TO BE CONSIDERED FOR INCLUSION ON THE “EXPORT LIST.” Deadline to submit coverages to ELANY is 7/19/13. ELANY sent a reminder also. http://www.elany.org/HotNews.aspx?docID=1781

NY: ELANY: Annual Report: The annual report includes regulatory and legislative updates, including efforts by ELANY to address the requirement for brokers to use due care in selecting an insurer. The report indicates that unless Regulation 41 is revised, brokers are exposed to regulatory violations and possible damages in a lawsuit should an insurer become insolvent. Regulations 41 continues to require that a number of financial documents be in the possession of either the excess lines broker or ELANY. A number of organizations have contended that they are no longer obligated to file the documents because they are eligible under the NRRA. http://www.elany.org/contentPDF/1769.pdf

NY: ELANY: APRIL NEWSLETTER. Includes information on legislation and court cases. It mentions efforts underway to pass domestic surplus lines insurer legislation in NY. The newsletter discusses E&S arbitration cases and suggests that brokers should be aware when a policy essentially waives an insured’s right to litigate its coverage disputes in a local court. This is particularly true if the arbitrations clause sets the arbitration venue in a foreign country or a state inconvenient to the insured. The newsletter suggests that Brokers should consider making advance disclosure of such policy provisions or obtain informed consent http://www.elany.org/contentPDF/1767.pdf

NY: ELANY Bulletin 2013-06 Export List Expansion: 4/17/13. Coverages added to the export list: 13th AMENDMENT TO REGULATION 41 (11 NYCRR 27): Asbestos, Fungi and Water Damage Remediation and Removal Liability and Property Damage. Builders Risk Insurance Coverage for construction projects where the total insured values exceed $10,000,000. 16

Elevator Service and Maintenance Contractors Liability and Property Damage. Excess Professional/Errors & Omissions Liability - All Classes Excess liability coverage where the underlying policy limits and/or self-insured retention is at least $10,000,000 per occurrence. Excess Salary Protection (Disability) Insurance as a monoline policy Insurance pursuant to Insurance Law section 1113 (a)(31)(A) against financial loss caused by the cessation of earned income due to disability from sickness, ailment or bodily injury, in an amount up to that portion of an individual’s annual earned income, which is in excess of the amount of in-force disability insurance from an authorized insurer [in amount not to exceed 75% of the individual’s annual earned income in total based upon the sum of in-force disability insurance and salary protection insurance when benefits are payable to individual or individual’s beneficiary]. Large Law Firm Lawyers’ Professional Liability Insurance (LPL) Professional liability for a law firm that has more than 100 attorneys. Recreational Guide Services Coverage for outfitters and guides for Camping, Hiking, Rafting, Bungee Jumping, Parachuting, Hunting and Fishing Clubs, Shooting Ranges, Hunting and Fishing and similar recreational activities. Vacant or Unoccupied Buildings Primary and/or Excess “Liability” Insurance for vacant or unoccupied Buildings. http://www.elany.org/HotNews.aspx?docID=1765 http://www.elany.org/contentPDF/1765_135.pdf

NY: Circular Letter 2, 2013, 6/6/13: Disaster Preparedness, Planning and Response. This Circular letter addressed to several organizations including the Excess lines Association of New York. It sets forth standards expected in planning and preparing for, and responding to, disasters in NY, describes the role of the NY State Disaster Coalition and the organization and operation of the Insurance Emergency Operations Center ("IEOC"), describes the data reports and plans (Pre-disaster Data; Business Continuity Plan and Disaster Response Plan Questionnaires; and Disaster Response Plans) that various property/casualty insurers are expected to provide the Department of Financial Services ("Department") before a disaster strikes, so that the Department can assist promptly in organizing the industry response to a disaster, describes the part played by insurance company Disaster Liaisons in staffing the IEOC and responding to Department requests for information. The Circular letter indicates that Disaster Response Plan and Questionnaire requirements in sections 2(a) and 2(b) apply to all addressees of this circular letter except financial guaranty insurers, mortgage guaranty insurers, title insurers, and the Excess Line Association of New York. Since the New York State Insurance Disaster Coalition procedures and the IEOC continue to be integral parts of the industry’s response to any disaster in New York State, the submission of the pre-disaster data and each insurer’s Disaster Response Plan are necessary to maintain the effectiveness and accuracy of information used by the Disaster Coalition in the event of a future disaster. The letter describes the process for obtaining Insurance Temporary Adjuster Permits and the reporting process when Hurricane or Windstorm Deductibles are invoked. Finally, the letter describes the post disaster reporting process (Post Disaster Data and Loss Statistics). Replaces and repeals Circular Letter No. 1 (2012). http://www.dfs.ny.gov/insurance/circltr/2013/cl2013_02.htm

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NY: ELANY: ELANY’s enforcement authority. Excess Line Assn. of N.Y. (ELANY) v Waldorf & Assoc. 2013 NY Slip Op 23163 Decided on May 3, 2013 Supreme Court, Suffolk County Emerson, J. Determined that, unless expressly or impliedly stated in its mandate, ELANY should refer such matters to Superintendent. A notice of appeal has been issued. http://law.justia.com/cases/new-york/other-courts/2013/2013-ny-slip-op-23163.html

NY Circular Letter No. 6 (2013), Iran Freedom and Counter-Proliferation Act of 2012 Compliance (IFCPA). The circular letter explains that the IFCPA became effective on July 1, 2013. Of particular concern to the Department, the IFCPA imposes sanctions on any entity that provides underwriting services, insurance, or reinsurance (“insurance services”) (1) “for any activity with respect to Iran for which sanctions have been imposed under this … or any other provision of law”; or (2) to or for any person engaged in transactions enumerated in the IFCPA; or (3) to or for any person included on the specially designated nationals (“SDN”) list. Any entity that knowingly provides such services is subject to the sanctions described in § 6(a) of the Iran Sanctions Act of 1996. . http://www.dfs.ny.gov/insurance/circltr/2013/cl2013_06.htm

NY: B&A DEMOLITION AND REMOVAL, INC., v. MARKEL INSURANCE COMPANY, 11-cv-0572 (ADS)(ARL) US DISTRICT COURT FOR THE EASTERN DISTRICT OF NY, 4/18/13, Filed. At issue was whether the policy was governed by New York’s “no prejudice” rule, whereby an insurer need not demonstrate prejudice in order to disclaim coverage based on an insured’s delay in providing notice of claim or suit, or whether the policy was governed by the “notice prejudice” standard set forth in New York Insurance Law §3420(a), as amended by the New York legislature effective January 17, 2009. The amended §3420(a) states late notice disclaimers will only be effective if the insurer has been prejudiced by the insured’s delay in providing notice. The changes to §3420(a) only apply to policies “issued or delivered” on or after January 17, 2009. There was no dispute that the insurer transmitted a copy of the policy, via email, to the wholesale broker, on December 1, 2008. The wholesaler testified that she emailed a copy of the policy to the retail broker, on the same day. The retailer, however, claimed not to have received the email because of an apparent technical problem with its email server. The retailer contended that it did not have actual receipt of a copy of the policy until sometime in February 2009. The Court held that "an individual's legal agency status in an insurance transaction, including delivery of the policy, is not determined by occupational classification, i.e. insurance broker or insurance agent, or any other formalistic test, but rather by the nature and weight of the surrounding circumstances." Here, the Court found that the evidence reveals that the wholesale “broker” was an agent of the insured with regard to the "delivery" of the Policy. The "delivery" took place when the wholesale broker received the Policy prior to January 17, 2009, when the requirement to show prejudice was enacted, therefore, the untimely notice by the insured precluded recovery under the Policy. http://www.leagle.com/decision/In%20FDCO%2020130419C41 Related article: http://www.andersonkreiger.com/blogs/betweenthelines/index.php/who-does-a-wholesale-broker- represent/

OK: May Tornados: Moratorium: Bulletin PC 2013-04. Among other provisions this bulletin provides that coverage for insureds in the affected counties shall continue under all insurance policies in effect immediately preceding the severe storms occurring on May 19, 2013, and shall remain in effect until such time as Executive Order 2013-20 is terminated. Insureds in the affected counties may request and 18 obtain a copy of any of their insurance policies free of charge. Any rate increase for insurance policies in affected counties with an effective date on or after May 19, 2013 shall be deferred during the pendency of this emergency. The coverage shall remain in effect at the previously established rate. It states that it applies to surplus lines insurers. https://www.ok.gov/oid/documents/13-0499-EMG%20SDD%20Bulletin%205-24-13.pdf

OK: Update: Bulletin PC 2013-06 to all PC Insurers and Producers: Nonrenewal of Policies While Weather Related Claims Remain Open. In this bulletin, the Insurance Commissioner strongly advises insurers to retain insureds on their current policies for a reasonable amount of time, to include no fewer than sixty (60) days following the completion of repairs. The second link is related news release. https://www.ok.gov/oid/documents/061312_Update%20to%20Weather- related%20claims%20bulletin.pdf http://www.ok.gov/triton/modules/newsroom/newsroom_article.php?id=157&article_id=12055

PA: PASLA: 7/23/13: Bulletin: New Electronic Signature Process for the 1609-PR Form. After carefully reviewing with counsel, and obtaining approval from the Insurance Department, the PASLA announced that effective immediately the utilization of electronic signatures on the Producer Affidavit (1609-PR) will be acceptable as part of the filing process subject to the following requirement. For those risks involving electronic signatures, PASLA will require that the Surplus Lines Licensee attach an addendum to the 1609-SLL forming a part of the overall surplus lines filing. A link to the addendum is below. In addition, in order for the PASLA to verify that the 1609-PR form has been signed electronically the following must appear on the signature line of the 1609-PR form “/s/ [writing producer name]”. http://www.pasla.org/Bulletins/B-2013-7-23.pdf http://www.pasla.org/documents/1609-PRElectronicSignatureAddendum.pdf

PA: Proposed surplus lines regulations. On February 22, 2013, the Pennsylvania Insurance Department submitted proposed rulemaking Regulation #11 – 251: Surplus Lines Insurance to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Banking and Insurance Committee and the House Insurance Committee. The proposed regulation revises surplus lines regulations – Chapter 124 of Title 31 of the Pennsylvania Code – to reflect changes in the Surplus Lines Act, 40 P.S. Section 991.1601 et seq., made in 2010, and in 2011 in response to the NRRA. Note on the link, there are comments by the Ins. Federation of PA and the Independent Agents of PA as well as by the IRRC (Indep. Regulatory Review Commission) thru 5/8/13. This rule also proposes to add Section 124.11 (relating to exempt commercial purchaser) to require a surplus lines licensee to file with the Department a written declaration reporting transactions involving exempt commercial purchasers under section 1610(a.1) of the act, as added by Act 28. The date of public hearing was 9/19/13. http://www.irrc.state.pa.us/regulation_details.aspx?IRRCNo=2985 3/9/13: Proposed Rulemaking: http://www.pabulletin.com/secure/data/vol43/43-10/398.html

RI: eff. 10/3/13: Insurance Regulation 110: Property Insurance and Weather Related Claims. Note that Section 12 applies to all insurance issued to Rhode Island residents. A concise explanatory statement is the second link. http://www.dbr.ri.gov/documents/rules/insurance/InsuranceRegulation110.pdf

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RI: Notice of Proposed Rule-Making: Insurance Regulation 73 – Unfair Property/Casualty Claims Settlement Practices. Interested parties are invited to submit written or oral comments concerning the proposed regulations by 9/17/13 to Elizabeth Kelleher Dwyer, Department of Business Regulation, 1151 Pontiac Avenue, Cranston, Rhode Island 02920, [email protected]. A public hearing to consider the proposed amendment shall be held on 9/17/13. The changes, while primarily to conform to the NAIC model, and generally focus on auto coverages, include a change indicating that some provisions are applicable to all insurers. http://www.dbr.ri.gov/documents/rules/proposed/2013-propd73.pdf

RI: SB 715 SUB A 6/18/13 Chapter 100, Signed by Governor. This bill originally had specific language requiring surplus lines insurers to provide data upon request of the insurance division and would expand the requirements to provide accommodations to a policyholder affected by a catastrophe for all lines of insurance. The final bill removed the express provisions that required data from surplus lines insurers. http://webserver.rilin.state.ri.us/PublicLaws/law13/law13100.htm

SC: Construction Defects, Supreme Court, Legislation. Related Article: http://us-mg6.mail.yahoo.com/neo/launch?.rand=9dsn0gnq3cvk5

SC: S 460 6/13/13 signed and effective. This bill would amend 38-45-90 to exempt brokers from the duty to perform a diligent search of the admitted markets when seeking to procure business for exempt commercial purchasers in certain circumstances. Also adds eligibility requirements similar to the NRRA, but requires insurers to: “…meets at least the minimum capital and surplus requirements of this State.” http://www.scstatehouse.gov/sess120_2013-2014/prever/460_20130604.htm

SD: Summer 2013 DOI newsletter. The 2013 South Dakota Legislature passed Senate Bill 61, allowing insurance agents to act as consultants and charge consulting fees. The newsletter states that if you or your agency charge a fee for consulting and do not include this fee as a taxable insurance premium, you may have a state sales tax liability. As noted in SDCL 58-30-144.1, a fee and a commission may not be charged to the same insurance customer. http://dlr.sd.gov/insurance/publications/newsletter_summer13.pdf

Bulletin 13-04 Insurance Producers Rebates/Fees/Commissions. Date: September 30, 2013

Due to the passage of SB 61 in the 2013 Legislature, which allows producers to act as consultants, the Division is providing guidance on rebating, fees, and commissions. This Bulletin replaces Bulletin 06-06 and reconfirms Bulletin 92-01.

To act as a consultant, you must be a licensed insurance producer. The following conduct is prohibited for producers: • Rebating. This includes negotiating commissions with consumers or prospective

20 consumers.• Negotiating commissions with consumers under any circumstances. This includes writing policies "net of commission." • Charging any fee not specified in the insurance product. The exception is a consulting fee. • Collecting a consulting fee and commission on the same product with the same consumer. This also applies to surplus lines brokers.

The following conduct is permitted for producers: • For large group health and exempt commercial products, producers may negotiate commissions and premiums with the insurance company. • For large group health and exempt commercial products, producers may negotiate premiums with consumers. • Collecting only a commission on a product. • Collecting only a consultant fee concerning a product. • Collecting a consulting fee on one distinct product, and then collecting a commission on a dissimilar product with the same consumer.

The following conduct is required of producers: • When an insurance product is sold, the producer must charge the full amount of the premium, which includes any commissions or fees specified in the policy. Consultant fees are not subject to premium tax. (Consultant services are not consideration for insurance products. Any other fees are subject to premium tax. Sales tax may apply to consultant services.

SD: Consent order stemming from targeted market conduct exam. SD surety insurer agrees not to solicit in states where it is unlicensed or not approved for surplus lines insurance. The exam discusses SD direct procurement rules. http://dlr.sd.gov/insurance/admin_actions/reliamax_surety_consent_order.pdf http://dlr.sd.gov/news/releases13/nr073113_doi_reliamax.aspx http://dlr.sd.gov/insurance/market_conduct_exams/reliamax_examination_report.pdf

TN: Notice from DOI. This is to officially notify all surplus lines agents that effective immediately, the agent will be invoiced for all late filing of taxes and each Affidavit for Placing Surplus Lines Insurance SL 2 form that is not filled out correctly or completely. Title 56 Insurance, Chapter 14 Surplus Lines Insurance, § 56-14-117 states: “any violation of this part shall subject the agent to the revocation or suspension of the surplus lines agent’s license for a period of not less than one (1) year and a fine of not more than five hundred dollars ($500).” The first link is to the SL-2 filing procedure. http://www.tn.gov/insurance/documents/ProceduresforFilingElectronicAffidavits.pdf http://www.tn.gov/insurance/documents/ProcedureforaPTRefundRequest.pdf http://www.tn.gov/insurance/documents/SL3Amended.pdf

TN: Act 108: Provides criteria for a surplus lines insurer to provide coverage for governmental entities. 12-4-1007. Notwithstanding the Surplus Lines Insurance Act, or any other law to the contrary, the treasurer, with the approval of the board of claims, shall consider proposals from admitted carriers and nonadmitted surplus lines carriers. In order for nonadmitted carriers to be eligible for consideration under this section, at least two (2) admitted carriers must have declined to submit a proposal, and the nonadmitted carriers shall: (A) Have a minimum Best rating of "A-" and a financial size category of no less than "VI", or such other Best rating as may be established by the board of claims provided that the rating shall not be less than "A-" and the financial size category shall not be

21 less than "VI"; and (B) Be a member of an insurance holding company system, as defined in§ 56-11- 101(b), that has at least one (1) affiliate carrier admitted in this state as a property or casualty insurer. http://state.tn.us/sos/acts/108/pub/pc0403.pdf

TN: Ch. 444, 5/16/13, SB 150, Penalties for failure to pay surplus lines tax. Any surplus lines agent failing and neglecting to make returns and payments promptly and correctly as provided by present law will forfeit and pay to the state, in addition to the amount of these taxes, an amount equal to 5 percent for the first month or fractional part of the first month of delinquency. If the period of delinquency exceeds one month, the rate of penalty will be an additional 5 percent for the second month or fractional part of the second month and penalty thereafter at the rate of 0.5 percent per month of the amount of tax due, the maximum penalty not to exceed $10,000 for any surplus lines agent not more than three days delinquent. All delinquencies will bear interest at the rate of 10 percent per annum from the date the amount was due until paid. The penalty and interest will apply to any part of the tax unpaid by the due date and no penalty or interest may be waived.

Any surplus lines agent failing to pay the tax due plus penalty and interest for 60 days beyond the due date will thereafter be debarred from transacting any business of insurance in the state until these taxes and penalties are fully paid, and the commissioner will revoke the license of the surplus lines agent.

This authorizes the commissioner of commerce and insurance to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic monthly affidavits, annual reports and tax payments. Any fee set by rule under this provision may be assessed in addition to any applicable penalty and interest. In no event may the convenience fee exceed the actual costs incurred by the department in accepting electronic monthly affidavits, annual reports and tax payments.

AMENDMENT #1 specifies that any surplus lines agent failing to pay the tax due plus penalty and interest for 60 days beyond the due date "may," instead of "must," be debarred from transacting any business of insurance in the state until these taxes and penalties are fully paid. This amendment changes the bill's effective date to January 1, 2014. http://state.tn.us/sos/acts/108/pub/pc0444.pdf

TN: HB805: Introduced 2/1/13: SB356, Would repeal TN membership in SLIMPACT, eff. 7/1/14. The second link is a bill status sheet. No action as of 6/25/13. http://www.capitol.tn.gov/Bills/108/Bill/HB0805.pdf http://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=SB0356

TX: TWIA: 9/29/13. The DOI has issued a request for information regarding a clearinghouse or portal for TWIA, coastal wind coverage. By way of reminder, writings of affiliated SL insurers are included in assessment formula for admitted insurers. Also, certain tier one SL policies are surcharged to partially service Class 2 bonds. NO LINK

TX: SLSOT Third Quarter Lone Star Lines Newsletter. Includes legislative summary more summarized here with some links to the legislation:

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SB 697 removes the requirement that a nonresident SL agent hold a P&C license under certain conditions. Ch. 562. http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/SB00697F.pdf#navpanes=0

SB 698 Eff. 5/18/13. Applies to surplus lines insurers. Requires the insurer to refund to the insured unearned premium on an auto or residential property policy not later than the 15th business day after effective date of cancellation. http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/SB00698F.pdf#navpanes=0

SB951/ HB 1909: NRRA Conforming items: Ch. 595, SB 951 Enrolled and signed by Governor 6/14/13. This bill adds many of the NRRA definitions to the Texas code and provides that the laws apply only if Texas is the home state of the insured. It requires the broker to maintain evidence that the insured qualified as an exempt commercial purchaser. It amends Chapter 981 to comply with NRRA and conforms to NRRA requirements for alien insurers to be on the NAIC Quarterly listing of Alien Insurers but grandfathers current alien insurers meeting trust fund requirements; and it incorporates uniform eligibility standards if established in the future. http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/SB00951F.pdf#navpanes=0 http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/SB00951F.pdf#navpanes=0 http://www.capitol.state.tx.us/BillLookup/BillSummary.aspx?LegSess=83R&Bill=SB951

HB 500 clarifies franchise tax provisions relating to surplus lines. Enrolled bill link: http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB00500F.pdf#navpanes=0

HB 2911 Eff. 9/1/13 requires a real estate inspector to maintain financial responsibility in either a liability policy or bond. Minimum policy limits of $100,000/occurrence, $100,000aggregate. The E&O coverage can be issued by an eligible surplus lines insurer. http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB02911F.pdf#navpanes=0

SLSOT premium by line thru 7/31/13 is included showing an increase from 7/31/12 of over 25%. http://www.slsot.org/SLSOT/PubEdInformation/Lone%20Star%20Lines/LoneStarpdf/LoneStar8- 2013.pdf

HB880 4/16/13: Did not pass. This bill would have required $500,000/$1 million liability coverage in authorized company for sellers on premises of alcoholic beverages. As amended, it would permit SL insurers to issue the insurance. Status and text follow: http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=HB880 http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB00880H.pdf#navpanes=0

HB 1405 relates to transactions involving a managing underwriter and a retail agent. Enrolled bill link: http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB01405F.pdf#navpanes=0

TX: HB 2972: 5/25/13 eff. 1/1/14. This bill exempts premiums for certain insurance covering stored or in-transit baled cotton from surplus lines insurance premium taxes. http://www.capitol.state.tx.us/tlodocs/83R/billtext/pdf/HB02911F.pdf#navpanes=0

TX SLSOT: Second Quarter: Lone Star Lines newsletter. A copy of the newsletter is attached. 23 http://www.slsot.org/SLSOT/PubEdInformation/Lone%20Star%20Lines/LoneStarpdf/LoneStar5- 2013.pdf

TX: SLSOT Bulletin #SO-2013-08 6/28/13: Third-Party Policy Filing. In the past, only Texas licensed surplus lines agents have been permitted to report policies to the Surplus Lines Stamping Office of Texas, based on 28 TAC Sec. 15.6(d): “No surplus lines agent or agency shall shift, transfer, delegate, or assign his or her responsibility to a person or persons not licensed as a surplus lines agent.” Recently, the Department of Insurance (TDI) has determined that this does not prohibit an agent from entering into an agreement whereby another entity provides routine administrative services necessary for required filings with the Stamping Office. However, the surplus lines agent remains responsible for statutory compliance. This means the agent will be held accountable if statutory obligations are not met, and may be liable for late filing assessments and subject to penalties imposed by TDI and ensuring that taxes are correctly reported and paid to the Comptroller’s office. The bulletin goes on to address training for those doing filings. http://www.slsot.org/SLSOT/PubEdInformation/SLSOTBulletins/Bulletinpdf/June28-2013-08.pdf

TX: SLSOT Bulletin #SO-2013-07 5/23/13: New Texas Market Data Report Added – Stamping Office Totals. The New “Stamping Office Totals” report provides Texas Premium, Exempt Premium, Premium for Other States (on policies effective prior to 07/21/11), and Multi-State Premium (on policies effective on 07/21/11 and after). This premium information is available for 2012 and 2013. The report will be updated at the close of each calendar month. http://www.slsot.org/SLSOT/PubEdInformation/SLSOTBulletins/Bulletinpdf/May23-2013-07.pdf

TX: SLSOT: Bulletin #SO-2013-06 – 4/18/13 INSURER NUMBER CHANGES – RESCINDED RETRACTION OF SLSOT BULLETIN SO-2012-10. The previous bulletin was rescinded due to numerous issues that prevent Stamping office from making the expected changes. The primary problem is the duplication of several hundred numbers assigned to insurers and/or syndicates. As a result, the Stamping Office will not convert the insurer numbers or the syndicate numbers currently being utilized in the Electronic Filing System (EFS). Instead, the existing insurer numbers will continue to be used. http://www.slsot.org/SLSOT/PubEdInformation/SLSOTBulletins/Bulletinpdf/April18-2013-06.pdf

TX: SLSOT: Bulletin #SO-2013-05 – 4/1/13 Surplus Lines Individual Agent vs. Agency Filings. If the agent is employed by an agency, the agent must report the premiums and policies under the agency’s license number. Individual agents who are employees of an agency and do not report under the agency license are directly liable and is subjecting himself/herself to possible enforcement action by the department. The agency name must be published on the policy; policies filed with the stamping office must be filed under the agency license number; and premium taxes remitted under the agency license number to the comptroller in order for the individual agent to relieve him/her of this liability http://www.slsot.org/SLSOT/PubEdInformation/SLSOTBulletins/Bulletinpdf/April1-2013-05.pdf

TX: SideCars, Inc., v. TDI, et al, NO. 03-10-00720-CV, COURT OF APPEALS OF TEXAS, THIRD DISTRICT, AUSTIN, 5/30/13. This case involves the Insurance Department’s ability to regulate a collateral protection coverage provider. The Department and Commissioner claimed the provider had engaged in unauthorized insurance business. The trial court enjoined the provider, who appealed. The court explained that by requiring “collateral protection insurance to be placed with an insurer that is authorized to write insurance in this state or an eligible surplus line insurer,” the plain language of this 24 section acknowledges and confirms the Department's regulatory authority over collateral protection insurance. See Tex. Ins.Code §§ 801.051 (certificate of authority); 981.001–.222 (surplus lines insurance). http://caselaw.findlaw.com/tx-court-of-appeals/1633420.html

TX: 2013 U.S. Dist. LEXIS 126606, MAGNUM MINERALS, v. HOMELAND INSURANCE COMPANY OF NEW YORK, No. 2:13-CV-103-J UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, 2013 U.S. Dist. LEXIS 126606. September 5, 2013, Decided, September 5, 2013, Filed. The allegations are that Defendants have been violating Chapter 102 and Chapter 981 of the Texas Insurance Code through the issuance of surplus lines policies to potential class members from 2005 to the present. Specifically, the class alleges that the Defendants are violating: (1) Section 101.201 of the Code, which prohibits the issuance of insurance by an unauthorized insurer, unless the policy has been procured by a licensed surplus lines agent from an eligible surplus lines insurer; and (2) Section 981.004, which prohibits the procurement of surplus lines insurance before a diligent search for an authorized insurer willing to cover the risk. Plaintiffs therefore seek injunctive relief prohibiting Defendant "from enforcing any contractual rights or exclusions to insurance coverage" against any of the class members, as well as prospective and retrospective injunctive relief mandating that all Defendants "actually and expressly make a diligent effort and attempt to secure coverage" from an admitted Texas insurer and "present the results of such efforts and attempts to secure such coverage" to any "Texas insured or customer." The motion to remand was denied. http://docs.justia.com/cases/federal/district- courts/texas/txndce/2:2013cv00103/233364/82/0.pdf?ts=1378502573

TX: 013 U.S. Dist. LEXIS 94370, JETPAY MERCHANT SERVICES, LLC, Plaintiff, v. CHARTIS SPECIALTY INSURANCE COMPANY, and ROYAL GROUP SERVICES, LLC, Defendants.No. 3:13-CV-0401-M UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION 2013 U.S. Dist. LEXIS 94370 July 8, 2013, Decided July 8, 2013, Filed. Texas Insurance Code § 981.004 authorizes surplus lines insurers to provide surplus lines insurance in Texas only if the insurance is placed through a surplus lines agent. Tex. Ins. Code § 981.004. A surplus lines agent cannot issue or cause to be issued an insurance contract with an eligible surplus lines insurer unless the agent possesses a surplus lines license issued by the Texas Department of Insurance. Tex. Ins. Code § 981.202. After the hearing, RGS submitted the declaration of one of its principals, Richmond, confirming that, due to an "administrative error," he had not registered with the Texas Department of Insurance as a surplus lines agent when Chartis issued a surplus lines insurance policy to JetPay in Texas. Neither RGS, Chartis, nor any other person or entity involved with issuing JetPay's Binder and Policy had registered with the Texas Department of Insurance as a surplus lines agent. The parties thus agree that at the time Chartis issued its policy to JetPay, it did so with an agent who did not meet the state's licensing requirements. The motion to transfer to NY was denied. http://docs.justia.com/cases/federal/district- courts/texas/txndce/3:2013cv00401/228219/48/0.pdf?ts=1376380861

UT: Bulletin 2013-5, 6/5/13. This bulletin outlines what is considered a permissible inducements in connection with the quote, sale, continuation or termination of an insurance contract. It clarifies and replaces previous bulletin 2011-6. https://insurance.utah.gov/legal-resources/bulletins/documents/2013-5Signed.pdf

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UT: Removal of Bulletin 2010-4 Certificates of Insurance by bulletin 2012-7, link below. This is to clarify what some readers may have received regarding the change notice from Utah that 2010-4 has been deleted. https://insurance.utah.gov/legal-resources/bulletins/documents/2012-7Signed.pdf

VT: Bulletin 176: 6/3/13: Reminder that cancellation, nonrenewal and renewal provisions of VT law apply to surplus lines. http://www.dfr.vermont.gov/sites/default/files/Bulletin_176.pdf

VT: HB 198: As passed House 4/11/13. This bill is the Legacy Insurance Management Act, which regulates the receipt and management by Vermont companies of closed blocks of nonadmitted commercial insurance policies and reinsurance agreements. http://www.leg.state.vt.us/docs/2014/bills/House/H-198.pdf

WA: Eff. 6/13/13: Adopted amended rule WAC 284-15-010, which sets forth requirements applicable to surplus lines brokers. The change eliminates the requirement that surplus line brokers also be licensed as insurance producers with property and casualty lines of authority. The proposed rule is as follows: NEW SECTION http://www.insurance.wa.gov/laws-rules/legislation-rules/recently-adopted-rules/documents/2012- 32103P.pdf

WA: Courtesy filing prohibition. There is also some indication that the commissioner will consider rules to identify what activities constitute the "procurement" of surplus line insurance and clarify that these activities must be performed by a licensed surplus line broker. AGENCY CONTACT: Jim Tompkins, PO Box 40258, Olympia, WA 98504- 0258, [email protected]. The proposed rule is as follows: WA: WAC 284-15-015 Courtesy filing prohibited. (1) "Procured" as used in chapter 48.15 RCW and chapter 284-15 WAC means the act or acts necessary to obtain insurance coverage. (2) A surplus line broker licensed under chapter 48.15 RCW must not assist a person in complying with the requirements of RCW 48.15.040 if the person: (a) Is not licensed under chapter 48.15 RCW; (b) Obtains insurance coverage from an unauthorized insurer; and (c) Fails to procure the insurance coverage through a surplus line broker licensed under chapter 48.15 RCW. This subsection applies without limitation to the services of a courtesy filer.

WI: US DISTRICT COURT, EASTERN DISTRICT OF WI, RATAJCZAK et al v. BEAZLEY SOLUTIONS LIMITED and BEAZLEY FURLONGE LIMITED, Case No. 13-C-045. The court found that clear policy language imposed liability on the underwriter and there was no basis to impose liability upon the agent. http://dockets.justia.com/docket/wisconsin/wiedce/1:2013cv00045/62013/

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