Filing Procedures – Rule of Exportability
The Rule of Exportability
The term exportability refers to what business a surplus line broker can “export” to the non-admitted market versus what business should be placed in the admitted market. There are essentially two criteria that determine what business is eligible to be exported:
Insurance that can be procured from admitted insurers may not be exported to the surplus line market. Admitted insurers generally accept the more straightforward risks that lend themselves to using standard form policies and standardized rating manuals.
The Law requires a surplus line broker to ensure that a diligent search for the coverage is made among admitted insurers. Recognizing that it would place an unreasonable burden on consumers if insurance producers were required to submit risks to every admitted insurer to determine unavailability, the law considers declinations from three admitted insurers (Certification of Effort must be filled out) that actually write the particular type of insurance to be of unavailability.
Additionally, the Insurance Commissioner publishes a list, called the “Export List,” of risks and coverages for which the Commissioner has found no reasonable or adequate market among admitted insurers. Risks and coverages on the export list are deemed to be unavailable and may be exported without any declinations.
Exportation to obtain a lower rate or premium is prohibited. If the insurance product is available in the admitted market, it must be purchased in the admitted market even if the same product could be procured at a lower rate in the non-admitted market.
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