SB1015 - 452R - House Bill Summary

House of Representatives

SB 1015

surplus lines brokers

Sponsors: Senator Cirillo

X	Committee on Financial Institutions & Insurance
	Caucus and COW
	Third Read
	As Passed the House

SB 1015 amends the reporting requirements of surplus lines brokers and clarifies that a resident or nonresident insurance producer maintaining an office in this state may also be licensed as a Mexican insurance surplus lines broker.

History

Surplus line insurance is insurance coverage not readily available in the market and is generally considered a high risk policy provided by specialty insurers. Examples of items insured by surplus lines brokers include accidental death, aviation accidents, driving schools, explosives hauling, and antique and classic vehicles. State law requires unauthorized surplus lines brokers to file a report with the Department of Insurance of Insurance (DOI) within sixty days after procuring surplus lines insurance. The information required states the nature of the policy, the identification of the insured, premium information and a summary describing diligent efforts made by the broker to obtain coverage without success. The proposed legislation streamlines the surplus lines reporting requirements. The required broker information would be amended to reflect the identification number assigned by the National Association of Insurance Commissioners (NAIC), and the summary of diligent efforts is replaced by an affidavit affirming compliance with state law.

Additionally, statute provides that a licensed insurance producer maintaining an office in the state may be licensed as a Mexican insurance surplus lines broker. The proposed legislation is a technical clarification to conform with legislation passed last year (Laws 2001, Chapter 205) that provides that a resident or non-resident insurer may also be licensed as a Mexican insurance surplus lines broker.

Provisions

· Changes the reporting requirements of surplus lines brokers by eliminating the insurers address information and replacing it with the identification number assigned by the National Association of Insurance Commissioners.

· Removes the summary requirement outlining the efforts made by the surplus lines broker to obtain authorized coverage in the market.

· Stipulates that the broker must hold evidence of diligent efforts made to obtain authorized coverage and any declination of coverage in the broker's file for the duration of the insurance policy and for up to six years after the expiration of the policy.

· Clarifies that any resident or nonresident insurance producer maintaining an office in this state may also be licensed as a Mexican insurance surplus lines broker.

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· 45th Legislature