I appreciate you are seeking answers, but I must take exception to your statement that E & S insurers are 'unauthorized'. We are not. We are non admitted, making us free from the rate and form issues to which standard carriers are subject. The E & S marketplace is an integral part of the overall insurance programs, and allows coverages for the higher-risk, higher loss accounts which otherwise would go bare.
Again, and this is just from a cursory review of the Prop 103 FAQ sheet, it doesn't appear that the proposition governed all lines of insurance. It specifically names the lines it covers, so I would again suggest if you are having a specific issue with a particular carrier, contact the DOI and talk to them. In the few occasions where I have had personal contact with them, I find them to be as pleasant and polite, and definitely willing to help.
It is refreshing to read posts where someone has a genuine interest in what we all do for a living....and I hope you have a great rest of your day!
E&S Premium Rates Subject To Prop 103
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LadyBroker
- Insurance Journal Addict
- Posts: 366
- Joined: Fri Oct 13, 2006 9:10 pm
- Location: Southern California
E & S
"It's a typical day, on the road to Utopia.."
There is good social value to the non-admitted marketplace, it is meant to provide an alternative of last resort for people that can't find insurance through "authorized" insurers.
Also, my use of the term "unauthorized insurance" was to be synonymous with "nonadmitted insurance." Although there is clearly no difference between "unauthorized insurers" and "nonadmitted insurers" (i.e., see Code sections 25, 791.02(y) and 1620.3), I agree that it's probably better to refer to insurance from unauthorized insurers as "nonadmitted insurance," instead of "unauthorized insurance."
We should also be mindful of Government Code section 11342.2, which provides that no regulation may diminish the requirement of statutory law. That is, statutes trump regulations.
The Prop 103 Fact Sheet that is on the DOI's website does not list nonadmitted insurance and, even if it did, that Fact Sheet is not the law. The statutes define the law, and Prop 103's filing component is defined by CIC sections 1861.01 through 1861.14. Section 1861.13 provides, "This article shall apply to all insurance on risks or on operations in this state, except those listed in Section 1851." (Emphasis added.) "All insurance" means all insurance, not just the lines of insurance listed on the DOI's Fact Sheet; and Section 1851 does not exempt nonadmitted insurance. Anyone that cares to review the statutes may do so at http://www.leginfo.ca.gov/calaw.html.
Unless someone cites other statutory or case law to the contrary, non-admitted insurers are thus required by statute to file their rates, despite the fact that they are non-admitted. The DOI/commissioner is expected to enforce the Insurance Code and he may do so at any time. Wouldn't you hate to get blindsided? The law shouldn't be ignored, it should be fixed.
Thanks for the discussion.
Also, my use of the term "unauthorized insurance" was to be synonymous with "nonadmitted insurance." Although there is clearly no difference between "unauthorized insurers" and "nonadmitted insurers" (i.e., see Code sections 25, 791.02(y) and 1620.3), I agree that it's probably better to refer to insurance from unauthorized insurers as "nonadmitted insurance," instead of "unauthorized insurance."
We should also be mindful of Government Code section 11342.2, which provides that no regulation may diminish the requirement of statutory law. That is, statutes trump regulations.
The Prop 103 Fact Sheet that is on the DOI's website does not list nonadmitted insurance and, even if it did, that Fact Sheet is not the law. The statutes define the law, and Prop 103's filing component is defined by CIC sections 1861.01 through 1861.14. Section 1861.13 provides, "This article shall apply to all insurance on risks or on operations in this state, except those listed in Section 1851." (Emphasis added.) "All insurance" means all insurance, not just the lines of insurance listed on the DOI's Fact Sheet; and Section 1851 does not exempt nonadmitted insurance. Anyone that cares to review the statutes may do so at http://www.leginfo.ca.gov/calaw.html.
Unless someone cites other statutory or case law to the contrary, non-admitted insurers are thus required by statute to file their rates, despite the fact that they are non-admitted. The DOI/commissioner is expected to enforce the Insurance Code and he may do so at any time. Wouldn't you hate to get blindsided? The law shouldn't be ignored, it should be fixed.
Thanks for the discussion.
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SurplusFuss
- Insurance Journal Enthusiast
- Posts: 20
- Joined: Fri May 12, 2006 11:08 am
Just thought of another resource you might tap...
NAPSLO. http://www.napslo.org/
Certainly someone there would have an answer or be able to point you in a more definitive direction.
Are you a member of SILA? They have a message forum, too.
Like LadyBroker, I've never had problems dealing with the DOI or the CA SLA. I've found both to be helpful. If you're worried about them leading you astray, correspond by email so you have something in writing.
If all else fails, you might consider contacting a law firm or an expert witness who deals in surplus lines in CA. Might cost you some money, but it's better than taking a wild guess.
NAPSLO. http://www.napslo.org/
Certainly someone there would have an answer or be able to point you in a more definitive direction.
Are you a member of SILA? They have a message forum, too.
Like LadyBroker, I've never had problems dealing with the DOI or the CA SLA. I've found both to be helpful. If you're worried about them leading you astray, correspond by email so you have something in writing.
If all else fails, you might consider contacting a law firm or an expert witness who deals in surplus lines in CA. Might cost you some money, but it's better than taking a wild guess.
Thanks for suggesting that I contact DOI, SLA, NAPSLO and lawyers.
The DOI was asked months ago, verbally and in writing, but they never answered. Several lawyers that specialize in the field were also asked, but they couldn't answer the question either. Likewise, none of the people that read this forum answered the question (over 1496 "views" as of this writing), many of them probably affiliated with DOI, SLA, NAPSLO or law degrees.
If there was an answer it would have probably manifest by now.
The statutes I cited specifically require all insurers to file their rates. All insurers includes admitted and nonadmitted insurers. Until such time as alternative statutes are specifically cited, changed or adopted, I believe it incumbent upon all to follow the letter of the law as it currently exists.
The DOI was asked months ago, verbally and in writing, but they never answered. Several lawyers that specialize in the field were also asked, but they couldn't answer the question either. Likewise, none of the people that read this forum answered the question (over 1496 "views" as of this writing), many of them probably affiliated with DOI, SLA, NAPSLO or law degrees.
If there was an answer it would have probably manifest by now.
The statutes I cited specifically require all insurers to file their rates. All insurers includes admitted and nonadmitted insurers. Until such time as alternative statutes are specifically cited, changed or adopted, I believe it incumbent upon all to follow the letter of the law as it currently exists.
With all due respect, the question was asked and posted twice already. See posts dated 12-19-07 and 12-27-07.
Please also note that the definition of a "non-admitted insurer" proffered by csr@rant, without citation, is contradicted by the expressed language of CIC section 25: "Nonadmitted," in relation to a person, means not entitled to transact insurance business in this State, whether by reason of failure to comply with conditions precedent thereto, or by reason of inability so to comply." That's been the definition since 1935, and obviously there's nothing in it that generally exempts nonadmitted insurers from the requirements of California:'s Insurance Code.
While there is no statute that generally exempts nonadmitted insurers from complying with California's Insurance Code, to the contrary Section 41 holds, "All insurance in this State is governed by the provisions of this code."
Also, Section 12926 states, "The commissioner shall require from every insurer a full compliance with all the provisions of this code."
Likewise there is no exception for nonadmitted insurance from the filing requirements of Prop 103 and, to the contrary, Section 1861.13 states, "This article shall apply to all insurance on risks or on operations in this sate, except those listed in Section 1851." (Section 1851 does not list "nonadmitted" insurance or insurers.)
Furthermore, non-admitted insurers are required to comply with the Code as stated in Section 1765.1(f), "The commissioner shall establish a list of all surplus line insurers that have met the requirements of subdivisions (a) to (e), inclusive, and shall publish a master list at least semiannually."
1765.1(e)(6) provides, "The information available to the commissioner shall not indicate that the insurer offers in California a licensee products or rates that violate any provision of this code."
Thus, non-admitted insurers do fall under the jurisdiction of the DOI and they are required to comply with the Code if they wish to remain on the LESLI list.
If any of you have a legally sound basis to believe that nonadmitted insurers are exempt from these laws then kindly cite your specific authority; otherwise you should submit.
Please also note that the definition of a "non-admitted insurer" proffered by csr@rant, without citation, is contradicted by the expressed language of CIC section 25: "Nonadmitted," in relation to a person, means not entitled to transact insurance business in this State, whether by reason of failure to comply with conditions precedent thereto, or by reason of inability so to comply." That's been the definition since 1935, and obviously there's nothing in it that generally exempts nonadmitted insurers from the requirements of California:'s Insurance Code.
While there is no statute that generally exempts nonadmitted insurers from complying with California's Insurance Code, to the contrary Section 41 holds, "All insurance in this State is governed by the provisions of this code."
Also, Section 12926 states, "The commissioner shall require from every insurer a full compliance with all the provisions of this code."
Likewise there is no exception for nonadmitted insurance from the filing requirements of Prop 103 and, to the contrary, Section 1861.13 states, "This article shall apply to all insurance on risks or on operations in this sate, except those listed in Section 1851." (Section 1851 does not list "nonadmitted" insurance or insurers.)
Furthermore, non-admitted insurers are required to comply with the Code as stated in Section 1765.1(f), "The commissioner shall establish a list of all surplus line insurers that have met the requirements of subdivisions (a) to (e), inclusive, and shall publish a master list at least semiannually."
1765.1(e)(6) provides, "The information available to the commissioner shall not indicate that the insurer offers in California a licensee products or rates that violate any provision of this code."
Thus, non-admitted insurers do fall under the jurisdiction of the DOI and they are required to comply with the Code if they wish to remain on the LESLI list.
If any of you have a legally sound basis to believe that nonadmitted insurers are exempt from these laws then kindly cite your specific authority; otherwise you should submit.