Alaska Surplus Lines flashcards
Alaska Surplus Lines · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Surplus lines broker license
- An Alaska license authorizing a producer to place insurance with nonadmitted eligible insurers when admitted insurers cannot provide the coverage, subject to diligent search and tax duties.
- Home state broker
- The surplus lines broker licensed in the insured's home state who is responsible for the transaction, diligent search documentation, and premium tax filing for that insured.
- AS 21.34
- The Alaska statute governing surplus lines insurance, including broker licensing, eligible insurer requirements, diligent search, premium tax, and reporting obligations.
- Premium tax collection
- Alaska requires the surplus lines broker to collect the full premium tax from the insured at placement and remit it to the state; the broker may not absorb it.
- Diligent search
- A good-faith effort by the surplus lines broker to obtain the requested coverage from admitted insurers writing that class in Alaska before placing with a nonadmitted insurer.
- Written declination
- Documentation from an admitted insurer stating it declined the risk, including insurer name, date, and reason, used to evidence the diligent search.
- Diligent search exemption
- A statutory or regulatory exception allowing placement without a full admitted-market search for certain classes or export-list risks, which the broker must confirm applies.
- Eligible surplus lines insurer
- A nonadmitted insurer that the Alaska director has determined meets financial and other standards and has placed on the eligible insurer list.
- Unauthorized insurer
- An insurer not licensed in Alaska; it may be used for surplus lines only if eligible or otherwise permitted by AS 21.34 under limited circumstances.
- Trust fund requirement
- A security requirement for nonadmitted insurers, often alien insurers, held for the benefit of U.S. policyholders in the amount prescribed by Alaska regulation.
- Eligible insurer list
- The Division of Insurance's published list of nonadmitted insurers approved for surplus lines placements; brokers must verify eligibility at placement and renewal.
- Premium tax rate
- The statutory percentage applied to gross surplus lines premium in Alaska (commonly 2.7%, subject to change); the broker must confirm the current rate before remitting.
- Quarterly tax report
- The periodic filing to the Alaska Division of Insurance reporting surplus lines premium written and remitting the associated premium tax, with annual reconciliation.
- Broker personal tax liability
- The surplus lines broker is personally liable for remitting premium tax to Alaska even if the insured fails to pay the tax separately.
- Surplus lines surety bond
- A bond required of Alaska surplus lines brokers in the statutory amount (commonly $20,000 or as updated) to protect insureds and the state.
- Nonresident reciprocity
- A provision allowing a nonresident surplus lines broker to qualify in Alaska if licensed and in good standing in a home state granting reciprocal privileges.
- License renewal and CE
- Surplus lines brokers must renew their Alaska license on the division's cycle and satisfy continuing education requirements before renewal.
- Appointment requirement
- Surplus lines brokers place business with nonadmitted insurers and generally are not appointed by those insurers, but must remain licensed and in good standing.
- Nonadmitted insurer notice
- A required disclosure stating the insurer is not admitted in Alaska and is not subject to the same solvency regulation as admitted insurers.
- Guaranty fund disclosure
- A required notice that the surplus lines policy is not covered by the Alaska Insurance Guaranty Association and claims may be unprotected if the insurer fails.
- Commission disclosure
- The broker must disclose commissions and fees charged in the surplus lines placement to the insured as required by regulation and fiduciary duty.
- Unfair trade practices
- Acts prohibited by AS 21.36, including misrepresentation, false advertising, and unfair claim practices, which apply to surplus lines transactions.
- Alaska Insurance Guaranty Association
- The state guaranty mechanism under AS 21.80 that generally does not cover surplus lines (nonadmitted) insurers, leaving policyholders without that protection.
- Insurer financial review
- Because guaranty fund protection is absent, the broker must evaluate the nonadmitted insurer's financial strength and claims-paying ability before placement.
- Insolvency assistance
- If a nonadmitted insurer becomes insolvent, the broker should help the insured notify the insurer's domiciliary regulator and pursue any available domiciliary guaranty.
- Claims handling for nonadmitted
- Claims against nonadmitted insurers are handled by the insurer or its administrator; Alaska has less regulatory authority over these claims than over admitted insurers.
- Fiduciary premium handling
- A surplus lines broker holds premium and tax funds in a segregated trust account, must not commingle them, and must remit them timely.
- Undisclosed compensation
- Compensation from an insurer that the broker fails to disclose to the insured; accepting it violates the broker's ethical and fiduciary duties.
- Conflict of interest
- A situation where the broker's personal or financial interest may impair independent advice; the broker must avoid it and must not act as undisclosed principal.
- Confidential insured information
- Nonpublic information about the insured that the broker must protect and use only for purposes of the surplus lines placement.
- Transaction record retention
- The broker must retain the application, diligent search evidence, policy, tax calculations, and remittance proof for the period set by regulation and open to examination.
- Written surplus lines policy
- The placement must be evidenced by a written policy or certificate identifying the nonadmitted insurer and disclosing that it is not admitted in Alaska.