Virginia Code 38.2-4811: Surplus lines coverage to be placed with eligible nonadmitted insurers
A. No surplus lines broker shall procure a policy of insurance with any nonadmitted insurer unless such nonadmitted insurer has prior approval of the Commission to issue surplus lines insurance.
Terms Used In Virginia Code 38.2-4811
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Company: means any association, aggregate of individuals, business, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- Eligible nonadmitted insurer: means a nonadmitted insurer approved by the Commission pursuant to § 38. See Virginia Code 38.2-4805.2
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- NAIC: means the National Association of Insurance Commissioners. See Virginia Code 38.2-4805.2
- Nonadmitted insurer: means an insurer not licensed to engage in the business of insurance in this Commonwealth. See Virginia Code 38.2-4805.2
- Surplus lines broker: means an individual or business entity licensed pursuant to Article 5. See Virginia Code 38.2-4805.2
- Surplus lines insurance: means any property and casualty insurance permitted to be placed directly by an insured or through a surplus lines broker with an eligible nonadmitted insurer. See Virginia Code 38.2-4805.2
B. Any unlicensed foreign insurer wishing to be approved by the Commission to issue surplus lines coverage may receive such approval upon providing:
1. Evidence that it is authorized to write the type of insurance in its domiciliary jurisdiction; and
2. Proof that it has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction, which equal the greater of (i) the minimum capital and surplus requirements under §§ 38.2-1028, 38.2-1029, 38.2-1030 or § 38.2-1031, or (ii) $15 million.
C. Notwithstanding the capital and surplus requirements of subdivision B 2, an unlicensed foreign insurer may receive approval upon an affirmative finding of acceptability by the Commission. The finding shall be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. In no event shall the Commission make an affirmative finding of acceptability when the surplus lines insurer’s capital and surplus is less than $4.5 million.
D. An unlicensed alien insurer shall be deemed approved by the Commission if such insurer is listed on the Quarterly Listing of Alien Insurers maintained by the NAIC International Insurers Department.
E. Any unlicensed foreign insurer approved by the Commission shall cause to be provided to the Commission, not later than March 1, a copy of its current annual statement certified by the insurer, in accordance with § 38.2-1300.
The Commission, at its discretion, may extend the period for filing an annual statement by a maximum of two months.
F. If at any time the Commission has reason to believe that an eligible nonadmitted insurer (i) is in unsound financial condition, (ii) is no longer eligible under this section, (iii) has willfully violated the laws of the Commonwealth, or (iv) does not make reasonably prompt payment of just losses and claims in the Commonwealth or elsewhere, the Commission may declare it ineligible. The Commission shall promptly mail notice of all such declarations to each surplus lines licensee.
Code 1950, § 38.1-314.11; 1960, c. 503; 1979, c. 513, § 38.1-327.56; 1984, c. 719; 1986, c. 562; 1994, c. 647; 1995, c. 60; 2007, c. 157; 2011, c. 498; 2018, c. 205.