Non-Admitted Insurance in US Flashcards
Admitted Insurance
Heavily regulated
Surplus/excess lines
less regulated
- rates and forms dont have to be filed for approval
- insurers dont pay premium tax - broker/insured does
- no state guaranty fund protection
is surplus/excess lines a line of business
no
surplus or excess?
called excess line rather than surplus in a few states including NY
non-admitted insurance
insurers are not licensed to transact insurance in a state
types of except non-admitted insurance
- surplus lines
- industrial insured
- direct placement/independent procurement
- marine/aviation/transportation
who can use surplus lines
insurer must be eligible per federal Nonadmitted and Reinsurance Reform Act
Surplus lines broker
all surplus lines transactions must involve a licensed surplus lines broker in the home state of the insurance
what are surplus lines transactions subject to
the laws and regulations of the home state
Surplus lines diligent search
a broker generally must perform a diligent search of the admitted market to see if any admitted insurers are willing to write it
State export lists
some states hold hearings and publish lists of types of business that can automatically be written in the surplus lines market without diligent search
prohibited classes of business for surplus lines in all states
- life insurance
- workers compensation (primary layers)
- title insurance
- private passenger auto
what are the surplus lines premium tax
3-5%
