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 Banking, Insurance, Securities and Health Care Administration (BISHCA) 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:
Accordingly, BISHCA 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:
As of July 21, 2011, Vermont’s authorization for all non-admitted insurers has been terminated by BISHCA. The termination has also been reflected in the NAIC’s database. Future company filings with BISHCA 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 BISHCA 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 BISHCA’s Insurance Bulletin 163-“Non-Admitted Insurance Reform”.