Excess and Surplus Lines

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We previously blogged about the District of Connecticut’s decision in Arrowood Surplus Lines Ins. Co. v. Westport Ins. Corp., No. 08-cv-1393 (D. Conn. 2010), in which the court held that a reinsurer had no duty to honor the portion of a cedent’s loss that was outside the scope of the reinsurance agreement at issue.  In that case, Equity Residential argued that a policy issued to it by Arrowood Surplus Lines Insurance Company had a three-year period and sought coverage for losses that occurred from December 15, 1999 to December 15, 2002.
Read More Second Circuit Finds that Portion of Cedent’s Loss is Outside the Scope of the Reinsurance Agreement, Relieving Reinsurer of any Obligation to Follow the Fortunes

On September 30, 2010, the California Court of Appeal for the Second Appellate District affirmed a superior court ruling that California Constitution Section 28 taxes do not apply to surplus lines insurers.  Section 28 provides that insurers doing business in California are subject to a 2.35% premium tax. …
Read More California Appeals Court Affirms Ruling That Section 28 Tax Does Not Apply To Surplus Lines Insurers

The Massachusetts Division of Insurance (“MDOI”) recently amended its surplus lines laws to allow for the approval of alien unauthorized insurers in the state. Previously, Massachusetts required that alien surplus lines insurers maintain a trusteed surplus in the US of $20 million and file financial information on an annual basis following US accounting principles which effectively made obtaining surplus lines eligibility in the state prohibitive for alien insurers. …
Read More Massachusetts Amends Laws to Permit Alien Surplus Lines Insurers

Earlier this month, New Jersey Department of Bank and Insurance Commissioner Thomas Considine issued Bulletin No. 10-19 reminding surplus lines brokers that the $50 limitation remains in effect for fees charged by surplus lines brokers to originating brokers.  P.L. 2010, Chapter 42, which was enacted on July 6, 2010, amends N.J. Stat. Ann. § 17:22A-38b to allow for the Commissioner to set the fee limitation by regulation, however, it is not effective until October 1, 2010. …
Read More New Jersey Issues Reminder to Surplus Lines Brokers that the $50 Limitation for Fees Charged to Originating Brokers is Still in Effect

A public hearing on August 20, 2010 will explore the possibility of increasing insurance capacity in New York by easing access to unauthorized insurers. The New York State Insurance Department (“NYID”) is soliciting input from the public as it determines whether to revise eligible coverages on the Export List, as set forth in Insurance Department Regulation 41 (11 NYCRR 27). …
Read More New York Insurance Department to Hold Hearing on August 20, 2010 on Whether to Expand the Export List Under Regulation 41

The Minnesota Department of Commerce will lower the surplus lines stamping fee from 0.0025 to 0.0008, effective January 1, 2011.  The new stamping fee will apply to all surplus lines policies written or renewed after the effective date, and includes all premium bearing transactions on such policies. …
Read More Minnesota to Lower Surplus Lines Stamping Fee

Representatives of the United States House of Representatives and Senate attending the reconciliation conference on H.R. 4173, the Wall Street Reform and Consumer Protection Act, have come to an agreement on the streamlined regulation of multistate surplus lines insurance policies. …
Read More Surplus Lines Reform Approved by House/Senate Conferees

The 2011 Rhode Island state budget, which was enacted as HB 7397A and signed into law June 2, 2010, amends the taxation statutes applicable to surplus lines insurers and the Medical Malpractice Joint Underwriters Association.  Article 9 of HB 7397A contains both amendments. …
Read More Rhode Island 2011 Budget – Tax Implications for Surplus Lines Insurers and Medical Malpractice Joint Underwriters Association