Industry Issues | Surplus Lines Reform

Virginia to become the 14th DSLI state

Virginia - UPDATE

Virginia to become the 14th DSLI state

Virginia Senate Bill 542 has been passed by both the House and Senate, and is now enrolled for the Governor's signature. The bill establishes criteria for the licensing by the State Corporation Commission of domestic surplus line insurers. "Domestic surplus lines insurer" is defined to mean a domestic surplus lines insurer licensed by the Commission pursuant to § 38.2-1024 with which a surplus lines broker may place surplus lines insurance. The bill provides that a domestic surplus lines insurer is considered a nonadmitted insurer for the purposes of the federal Nonadmitted and Reinsurance Reform Act of 2010 with respect to risks insured in the Commonwealth. Policies issued by a domestic surplus lines insurer are subject to the same taxes and maintenance assessments levied upon surplus lines policies issued by eligible nonadmitted insurers, if the Commonwealth is the home state of the insured. Policies issued by a domestic surplus lines insurer would not be subject to the protections provided by the Virginia Property and Casualty Insurance Guaranty Association. The measure exempts policies issued by a domestic surplus lines insurer from all statutory requirements relating to insurance rating plans, policy forms, policy cancellation and nonrenewal, and premium charged to the insured in the same manner and to the same extent as a nonadmitted insurer domiciled in another state.