Federal legislation known as the Non-Admitted and Reinsurance Reform Act of 2010 (NRRA) became effective July 21, 2011. The legislation preempted much of Vermont’s statutory authority over Surplus Lines companies. Accordingly, Vermont’s statute has been updated to be consistent with NRRA. The Department of Financial Regulation (DFR) no longer maintains a list of admitted Surplus Lines insurers.
Under NRRA and Vermont statute (8 V.S.A, Chapter 138, §5026 as amended), a Vermont surplus lines broker is responsible for placing policies with any insurer that the broker determines qualifies as either:
- Being authorized to write such business in their state of domicile and maintain minimum capital and surplus of $15 million, or
- Is listed on the quarterly listing of alien insurers maintained by the NAIC international insurers department. The list can be obtained at the NAIC website, or
- Has received an affirmative finding by the Commissioner.
Accordingly, DFR no longer requires qualified non-admitted insurers (foreign or alien companies) to do any of the following in order to insure risks where Vermont is the risk’s home state as defined by NRRA:
- Apply to DFR for authorization to do insurance business in Vermont.
- Renew annually or maintain authorization from DFR to do insurance business in Vermont.
- File annual financial statements with DFR.
- File an annual “Vermont Premium Report” with DFR (prepared by alien companies).
- Pay any fees related to the above to DFR.
As of July 21, 2011, Vermont’s authorization for all non-admitted insurers has been terminated by DFR. The termination has also been reflected in the NAIC’s database. Future company filings with DFR and the NAIC should still put E for eligible in Column 1 of Schedule T if they meet the requirements of NRRA ($15 million and domiciled in an accredited state), because they are in fact eligible.
Although Vermont’s amended statute permits DFR to publish a list of insurers meeting one of the qualifications listed above, there are no plans to do so at this time.
For further information on NRRA, refer to DFR’s Insurance Bulletin 163-Non-Admitted Insurance Reform.