Filing the affidavit if a risk is found on the export/exportable list

Question:

Who files, the Surplus Lines licensee or the retail producer?

Answer:

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 state regulator has waived the diligent search requirement for those risks. As a result, the (generally three) declinations from admitted carriers are no longer needed in order to access the Surplus Lines market.
In every state, the export list is different. And the process to access the Surplus Lines market can be different too. So, 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.
Maryland has an exportable list available. It is part of the Surplus Lines regulation (COMAR 31.03.06.10. and is available for review on IA&B’s website as needed. Interestingly, while the regulation specifically states that an affidavit executed by the originating producer is required, the Maryland Insurance Administration stated that it has discontinued filing that affidavit and simply expects the agency to keep a record in the agency file. Other affidavits are still filed, but not this one.
Pennsylvania also has an export list. When a risk is on that list, the “1609-PR” (or three-declination) affidavit no longer needs to be provided. A different form, however, must be filled out by the Surplus Lines licensee to indicate that the risk is on the export list. The form in question is the 1604-E.
Of note to Pennsylvania members:
  • The export list is revisited every year, and IA&B always provides comments gathered from members in order to expand the list based on market needs. This has been done successfully over the years. Next time you are asked for your feedback, let us know what risks never can find a home in the admitted market.
  • The book “Compliance Pitfalls: How to Avoid Costly Fines and Penalties” contains an entire chapter dedicated to proper Surplus Lines submissions. The book is based on IA&B’s Pennsylvania compliance seminars highlighting the top 10 producer violations and how to prevent them.
The information contained in this resource is current as of the date published. Published date: August 22, 2013
This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.
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