Claire-ification

Are you a member with a question? Contact IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR to find the answer at 717-918-9202 or ClaireP@IABforME.com.

QUESTION:

When a risk is on the Export list, who files – the Surplus Lines broker or the retail producer?

QUESTION:

The answer to this question is state-specific. And before answering it, let’s talk briefly about the export list.

The export (or exportable) list is a list of risks that are inherently so hard to place that the risk is deemed generally unavailable, and the state regulator waives the diligent search requirement when placement involves those risks. As a result, the declinations from admitted carriers (generally three) are no longer needed before accessing the Surplus Lines market.

The export list varies by state, and the process to access the Surplus Lines market can differ, too. Let’s look at our three states.

Delaware currently does not have an export list at all. All submissions need the diligent search to be performed, and three declinations to be received from admitted insurers before placing the risk in the Surplus Lines market. This is evidenced with the SL-1923. Note that IA&B is planning to discuss the possible creation of an export list with the Department of Insurance this fall.

Maryland has an exportable list available. It is included in the Surplus Lines regulation (COMAR 31.03.06.10) and is available for review on IA&B’s website or by locating the most current version of the regulation. Interestingly, while the regulation specifically states that an affidavit executed by the originating producer is required when placing a risk that is on the exportable list, the Maryland Insurance Administration (MIA) has stated that there is no state-specific form. The retail agency can simply keep a record in the agency file that the risk was on the exportable list, something that the MIA could easily verify. Other forms and affidavits will still be filed by the Surplus Lines Licensee.

Pennsylvania also has an export list. When a risk is on that list, the “1609PR” (or three-declination) affidavit no longer needs to be provided. However, a different form – the 1604-E – must be filled out by the Surplus Lines licensee to indicate that the risk is on the export list.

Of note to Pennsylvania members:

▲ The export list is revisited every year, and IA&B always elicits feedback from members to provide comments to the PA Insurance Department. The goal is to have a list that properly reflects current market needs. IA&B has been successful in adding items to the list over the years. If you are aware of a category of risk that cannot be placed in the admitted market regardless of its individual characteristics, please contact IA&B’s Advocacy Department at Advocacy@IABforME.com.

▲ Our white paper on Surplus Lines delves into proper Surplus Lines submissions in greater detail. If you or your staff are not familiar with Surplus Lines placement, it may be a good place to start. To review existing resources on IA&B’s website, visit IABforME.com/surplus-lines.