Topic: Excess and Surplus Lines

New Insurance Platforms Arguably Require Producer Licenses

New York Associate Zachary Lerner authored a Law360 article on commission sharing, referral fee and producer licensing issues.  Within the article, Mr. Lerner identifies important issues for insurers and producers to consider, both in the admitted and surplus lines insurance markets, with respect to the sharing of commissions and whether proper licenses should be obtained in light of the NAIC’s recent comments regarding Lemonade Insurance Company’s application-based platform. The complete Law360 article is available here (subscription may be...

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NAPSLO Merges with AAMGA to form Wholesale and Specialty Insurance Association (WSIA)

The insurance world has its share of industry organizations, and a new one has arrived.  According to a joint announcement on July 25, 2017, the National Association of Professional Surplus Lines Officer (“NAPSLO”) merged with the American Association of Managing General Agents (“AAMGA”) to produce a new organization called the Wholesale and Specialty Insurance Association (“WSIA”). WSIA will combine the specialties of NAPSLO and AAMGA and represent the spectrum of whole, specialty and surplus lines interests and matters.  The board of WSIA will include members from both NAPSLO and AAMGA, with Corinne Jones serving as president. WSIA intends to offer the same opportunities and similar programs NAPSLO and AAMGA previously offered, along with host of additional services, educational programs and activities.  Programs such as the under-40s initiative of each legacy entity will continue as well under one, combined group. The potential for AAMGA to bring together industry participants from different sectors of the insurance arena is encouraging, and we will continue to report on any new initiatives and...

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You don’t need a weather man to know which way the wind blows* (*Bob Dylan)

Dave Jones, California Insurance Commissioner took an aggressive stand on Climate Change in a Press Release issued June 21, 2017, stating that if any “…climate denying politicians of red states who threaten to sue me, I will happily defend my obligation as California’s Insurance Commissioner to make sure insurers are addressing climate change related risks and to protect California consumers.” He further noted, “The threats of lawsuits by 12 red state attorneys general and one governor are not going to stop me from doing my job as insurance commissioner to make sure that insurance companies are recognizing potential financial risks associated with climate change.” He pointed out that the bankruptcy of over 35 coal companies and the refusal of four major US banks to provide loans for new coal infrastructure, and the shift away from fossil fuels (oil, gas, coal and utilities that rely on those) creates a risk of becoming ‘stranded assets’ “ …on the books of insurance companies with significantly reduced or no value.” Commissioner Jones then asked those regulated insurance companies to “voluntarily divest from coal…and to publicly disclose their investments in coal, oil, gas, and utilities so insurers, regulators, shareholders, and consumers have better insight into these investments and the risks they face due to climate change. Insurers doing business in California now know which way the wind...

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Texas Legislature Passes Domestic Surplus Lines Insurance Company Legislation

The Texas Legislature has passed legislation authorizing domestic surplus lines insurance companies in Texas, which may lead to an influx of new insurance company applications for licensure and redomestication to Texas applications as insurer groups seek to take advantage of the increasingly liberalized Texas rules governing its surplus lines market. An option for domestic surplus lines authorization in Texas eliminates the need to utilize out-of-state insurers as designated surplus lines writers for Texas-based risks and permits those risks to be underwritten by Texas domestics on a surplus lines basis. Texas also recently enacted legislation relaxing surplus lines procurement conditions for so-called “industrial insureds.” Those highly favorable for business rules become effective September 1, 2017. To qualify for the newly authorized statutory category of Domestic Surplus Lines Insurer designation, insurance companies must meet certain eligibility requirements and may not concurrently write admitted risks in Texas. Surplus lines procurement requirements and disclosures will still apply to domestically placed risks. The legislation expressly authorizes eligible out of state insurers to re-domesticate to Texas as a Domestic Surplus Lines Insurer. The domestic surplus lines legislation was broadly supported by the Texas Department of Insurance and if signed by Governor Greg Abbott in the coming days, should become effective January 1,...

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