New Jersey Surplus Lines flashcards
New Jersey 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 insurance
- Coverage placed with a nonadmitted insurer when authorized insurers will not provide the coverage; it fills admitted-market gaps but lacks state guaranty fund protection.
- Diligent search
- The documented effort by a surplus lines producer to obtain coverage from authorized insurers before placing with a nonadmitted insurer, including refusals or insufficient capacity.
- Eligible surplus lines insurer
- A nonadmitted insurer that meets the Commissioner's financial and market conduct standards and is authorized to write surplus lines in New Jersey.
- Unauthorized insurer
- An insurer not licensed to transact insurance in New Jersey; coverage may be placed only if the insurer is an eligible surplus lines insurer or a statutory exemption applies.
- Surplus lines premium tax
- A tax on surplus lines premiums, generally 5% in New Jersey, collected by the surplus lines producer and remitted to the state within the prescribed timeframe.
- Surplus lines report
- A filing the surplus lines producer must submit to the Department for each placement, including policy details, premium, and insurer information.
- Guaranty fund protection
- Coverage from state guaranty associations for admitted insurers; surplus lines policies placed with nonadmitted insurers are not protected by these funds.
- Producer licensing
- A resident or nonresident license issued by the Commissioner of Banking and Insurance allowing a person to sell, solicit, or negotiate insurance in New Jersey.
- Continuing education requirement
- Generally 24 credit hours per two-year license term, including at least 3 hours of ethics, required for producer license renewal in New Jersey.
- Change of address notice
- A producer must notify the Department of Banking and Insurance of a change of name, address, or email within 30 days of the change.
- Fiduciary duty
- A producer's obligation to act in the insured's and insurer's best interest, including timely premium remittance, accurate records, and disclosure of compensation.
- Unfair claim practices
- Violations of New Jersey rules governing claim acknowledgment, investigation, and coverage communication timeframes, subject to penalties by the Commissioner.
- File-and-use rating
- A rate filing framework where insurers file rates with the Department and may use them immediately, subject to later review, for most property-casualty lines.
- Commission sharing prohibition
- A producer may not share commissions with an unlicensed person, except for permitted bona fide referral arrangements not based on the sale of insurance.
- Commissioner's authority
- The Commissioner of Banking and Insurance may examine insurers and producers, issue cease-and-desist orders, impose penalties, and suspend or revoke licenses.
- Surplus lines producer license
- A license required to place surplus lines coverage in New Jersey, held by a resident or nonresident producer meeting state eligibility requirements.
- Nonadmitted insurer notice
- A written disclosure to the insured stating the insurer is not authorized in New Jersey and the coverage is not protected by the state guaranty fund.
- NAIC IID list
- The National Association of Insurance Commissioners International Insurers Department list of nonadmitted insurers meeting financial standards, generally recognized for eligibility.
- Record retention
- The requirement to keep surplus lines placement records, including diligent search documentation and policy information, for at least five years.
- Premium tax remittance
- The surplus lines producer's duty to collect and remit the surplus lines premium tax to the state within the timeframe prescribed by regulation.
- Insurer eligibility verification
- The producer's duty to confirm a nonadmitted insurer is an eligible surplus lines insurer at placement and to monitor status during the policy period.
- Policy delivery duty
- The producer must deliver policy documents and endorsements promptly and ensure the insured understands the nonadmitted coverage's terms and limitations.
- Statutory exemption
- A specific statutory exception allowing placement with an unauthorized insurer, such as certain industrial insureds, without surplus lines eligibility.
- Cease-and-desist order
- An enforcement action the Commissioner may issue against insurers or producers for unlicensed insurance activity or violations of the Insurance Code.
- Biennial license renewal
- New Jersey producer licenses expire every two years and require continuing education completion for renewal.
- Nonstandard policy forms
- Surplus lines policies often use forms not filed with the state, giving flexibility in coverage language but requiring careful review by the producer.
- Industrial insured exemption
- A statutory exception permitting certain large commercial insureds to obtain coverage from unauthorized insurers without surplus lines eligibility requirements.
- Surplus lines tax rate
- The percentage of gross surplus lines premiums owed to New Jersey, generally 5%, set by statute and subject to change.
- Department filing duty
- The surplus lines producer must file required placement reports with the Department or its designee within the prescribed timeframe.
- Admitted market capacity
- The availability of coverage from authorized insurers; surplus lines placement is permitted only when admitted market capacity is insufficient.
- Producer recordkeeping
- The duty to maintain accurate records of diligent search, placement, and premium tax payment, available to the Commissioner upon request.
- PLIGA
- The New Jersey Property-Liability Insurance Guaranty Association, which protects insureds of admitted insurers but not those of nonadmitted surplus lines insurers.