Surplus Lines Companies Filing Information
What this domain tests
The Surplus Lines Companies Filing Information domain tests how Pennsylvania regulates unauthorized insurers that write surplus lines under the Surplus Lines Law (40 P.S. § 991.1601 et seq.) and 31 Pa. Code Chapter 124: eligibility, the Department's list, financial filings, and the reports and taxes surrounding each placement.
Eligibility and the list
A surplus lines licensee may place business only with an insurer on the Pennsylvania Insurance Department's list of eligible surplus lines insurers. To be listed, an unauthorized insurer generally must be authorized in its domiciliary state, meet minimum capital and surplus standards, have satisfactory financial standing, and file a consent to service of process appointing the Insurance Commissioner as agent. The insurer must file annual statements and other financial reports, and must notify the Department of material changes such as name, address, ownership, or a decline in surplus. An insurer that fails to file or falls below standards can be removed from the list, and placements made after removal are improper.
Placement reporting
For each surplus lines placement the licensee files a report or bordereau identifying the insured, insurer, coverage, and gross premium. The licensee also collects and remits the applicable surplus lines premium tax. Records supporting the placement, including diligent-effort documentation and the disclosure, must be retained for the period the Department requires.
Worked example
A retail producer has a commercial property risk that three authorized insurers decline. The producer finds an offshore insurer with strong financials, but it is not on Pennsylvania's eligible list. The producer cannot place the risk there. The correct step is to search for a listed eligible insurer or place with an authorized carrier; placing with an unlisted insurer exposes the producer to penalties even though the policy would respond to a claim.
Traps
Assuming any insurer licensed in another state is eligible; forgetting the consent to service and annual statement requirements; using an insurer after it has been removed from the list; and failing to document premium and placement reports.