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

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Fall 2013 Surplus Lines Law Group Fall Meeting Electronic Documents State Materials in Alphabetical Order 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 2 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. 3 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.
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