Industry Issues | Surplus Lines Reform

Alaska Division of Insurance Issues Request for Market Data from Certain Surplus Lines Companies

Regulatory Update - Alaska

PCI has received a member inquiry regarding a new surplus lines company data call from the DOI in Alaska. According to the emailed notice, the Alaska Division of Insurance is looking for information about the 2017 surplus lines transactions written for "risks located in Alaska with Alaska as the home state of the insured as reported in the 2017 annual statement on Schedule T." The following details are requested:

. Name of Surplus Lines Broker firm (not an individual) and Alaska license #, if known
. Name of Insured
. Policy #
. Effective date
. Premium written
. Policy fees 
. If endorsement: date endorsement added to policy and Premium.  Not the effective date of endorsement that could go back to the inception of the policy. 

This information will be maintained as confidential per Alaska statute 21.09.320. However, no statutory authority was cited for conducting this data request.

In an additional correspondence, the DOI stated that this information is being requested "from all surplus lines insurance companies in which there is a large disparity between what the company is reporting as Alaska risk to what the brokers have reported." Also, respondents may drop the policy fees and endorsement dates from the request if not readily available.

While not involved in conducting this data request, PCI kindly requests your affirmative response if you have also received this email notification from the Alaska DOI.

Alaska Adopts Revised Surplus Lines Regulations

On August 13, 2014 the Alaska Division of Insurance issued Bulletin 14-05 regarding changes in the Division's surplus lines regulations to conform to the federal Nonadmitted and Reinsurance Reform Act of 2010.

The revised regulations impact surplus lines premium tax payments, surplus lines filing fee payments, surplus lines unauthorized insurers, alien surplus lines insurers fees, and fees for portable electronics limited producer licenses. The new regulatory requirements take effect on September 4, 2014.

Affected regulations include 3 AAC 21, 3 AAC 25, 3 AAC 31, 3 AAC 21, 3 AAC 25, and 3 AAC 31 - .

Changes to 3 AAC 25 - Surplus Lines - Unauthorized Insurers include:
  • The time frame for when a producing broker must provide a surplus lines broker with documentation of a diligent search of the admitted market has changed to not later than 15 days after the binding of the insurance contract.
  • Information regarding an exempt commercial purchaser was added to the documentation section for diligent search.
  • The producing broker shall include in the diligent search documentation a description of the kind of insurance that is adequate for the director to determine whether insurance coverage is available in the admitted market to cover the kind of insurance.
  • The requirement that the Alaska policyholder notice must be part of a binder and cover note has been eliminated. It remains a requirement that the policy must contain the notice and it is the surplus lines broker's responsibility to ensure the notice is part of the policy.
  • Clarification is made that subsequent endorsements and company audits related to a policy are considered evidence of insurance.
  • The report of surplus lines transaction form no longer needs to be signed by a surplus lines broker, just the quarterly report. New forms will be available September 4, 2014 on the division website.
  • Monthly reports have been eliminated and replaced with Quarterly reports.
  • The application to become an eligible surplus lines insurer has been repealed and readopted to set forth the eligibility requirements for surplus lines insurers to conform with the NRRA.

Alaska DOI Proposes Regulations to Conform to Statutes and the NRRA

The Alaska Division of Insurance proposes to adopt regulations to modify the surplus lines requirements to conform to Alaska statute changes due to the federal Nonadmitted and Reinsurance Reform Act of 2010. The regulations also include modifications to the diligent search requirements, additional requirements for the notice of nonrenewal and premium increase, and fees for the new portable electronic limited producer licenses.

For reference, the statutes related to insurer eligibility requirements are attached.

All comments must be submitted no later than 5:00 p.m., Alaska Daylight Time, March 21, 2014.

Oral or written comments also may be submitted at a hearing to be held on Wednesday, March 12, 2014. Proposed Regulation: Surplus Lines Requirements