(1)A broker shall not place
any coverage with a nonadmitted insurer unless, at the time of placement, the
nonadmitted insurer meets all applicable eligibility requirements contained in the
federal act or is an insurance exchange, Lloyds plan, or group of incorporated
insurers under common administration that has been approved by the commissioner
and is included on the list of eligible nonadmitted insurers prepared by the
commissioner at least annually. To be placed on the eligible list, the nonadmitted
insurer shall:
(a)Submit a current year's application, fees as prescribed by sections 10-3-207 and 24-31-104.5, C.R.S., and other information required by the commissioner. In
the case of an insurance exchange, the nonadmitted insurer shall submit an
aggregate combined annual stat
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(1) A broker shall not place
any coverage with a nonadmitted insurer unless, at the time of placement, the
nonadmitted insurer meets all applicable eligibility requirements contained in the
federal act or is an insurance exchange, Lloyds plan, or group of incorporated
insurers under common administration that has been approved by the commissioner
and is included on the list of eligible nonadmitted insurers prepared by the
commissioner at least annually. To be placed on the eligible list, the nonadmitted
insurer shall:
(a) Submit a current year's application, fees as prescribed by sections 10-3-207 and 24-31-104.5, C.R.S., and other information required by the commissioner. In
the case of an insurance exchange, the nonadmitted insurer shall submit an
aggregate combined annual statement of all underwriting syndicates operating
during the period reported, in addition to individual annual statements for each
syndicate.
(b) (I) In the case of a foreign insurer, meet all applicable eligibility
requirements contained in the federal act. The commissioner may approve an
insurer with less than the required minimum requirements upon an affirmative
finding of acceptability by the commissioner. The finding must be based upon such
factors as quality of management, capital and surplus of any parent company,
company underwriting profit and investment income trends, market availability, and
company record and reputation within the industry. The commissioner shall not
make an affirmative finding of acceptability when the insurer's capital and surplus
is less than four million five hundred thousand dollars.
(II) In the case of an insurance exchange created by the laws of a state
other than this state, the syndicates of the exchange shall have and maintain, under
terms acceptable to the commissioner, capital and surplus of not less than seventy-five million dollars in the aggregate. The insurance exchange shall maintain, under
terms acceptable to the commissioner, not less than fifty percent of the
policyholder surplus of each syndicate in a custodial account accessible to the
exchange or its domiciliary commissioner in the event of insolvency or impairment
of the individual syndicate. In addition, each individual syndicate to be eligible to
accept surplus lines insurance placements from this state shall meet either of the
following requirements:
(A) For insurance exchanges that maintain funds in an amount of not less
than fifteen million dollars for the protection of all exchange policyholders, the
syndicate shall have and maintain, under terms acceptable to the commissioner,
minimum capital and surplus of not less than five million dollars; or
(B) For insurance exchanges that do not maintain funds in an amount of not
less than fifteen million dollars for the protection of all exchange policyholders, the
syndicate shall maintain, under terms acceptable to the commissioner, minimum
capital and surplus of not less than the minimum capital and surplus requirements
under the laws of its domiciliary jurisdiction or fifteen million dollars, whichever is
greater.
(c) (I) In the case of an alien insurer, as defined in section 10-3-301 (1),
maintain status on the current national association of insurance commissioners'
international insurers department listing;
(II) In the case of a Lloyd's plan or other similar unincorporated group of
individual insurers, or a combination of both unincorporated and incorporated
insurers, such alien insurer shall have and maintain a trust fund in the United
States, in an amount of not less than one hundred million dollars, which trust fund
shall be available for the benefit of United States surplus lines policyholders of any
member of the group. The group shall, in addition, maintain in the United States a
trust fund or trust funds in an amount satisfactory to the commissioner that is not
less than the amount required by the law of the state where the trust fund or trust
funds are located. The incorporated members of the group shall not be engaged in
any business other than underwriting as a member of the group and shall be subject
to the same level of solvency regulation and control by the group's domiciliary
regulator as are the unincorporated members. The trust funds shall be maintained
in an irrevocable trust account in the United States in a qualified financial
institution and shall consist of cash, securities, letters of credit, or investments of
substantially the same character and quality as those that are eligible investments
for the capital and statutory reserves of admitted insurers to write like kinds of
insurance in this state, and the trust instrument representing the surplus portion of
the trust deposit shall satisfy the requirements of the standard trust agreement
required for listing with the national association of insurance commissioners'
international insurers department.
(III) In the case of a group of incorporated insurers under common
administration that has continuously transacted an insurance business outside the
United States for at least three years immediately before May 16, 1995, and that
submits to this state's authority to examine its books and records and bears the
expense of the examination, have and maintain an aggregate policyholders' surplus
of ten billion dollars and have and maintain in trust a surplus in the amount of one
hundred million dollars, all of which surplus funds shall be available for the benefit
of United States surplus lines policyholders of any member of the group. Each
insurer shall individually maintain capital and surplus of not less than twenty-five
million dollars per company. The trust funds shall satisfy the requirements of the
standard trust agreement requirement for listing with the national association of
insurance commissioners' international insurers department, shall be maintained in
an irrevocable trust account in the United States in a qualified financial institution,
and shall consist of cash, securities, letters of credit, or investments of
substantially the same character and quality as those that are eligible investments
for the capital and statutory reserves of admitted insurers to write like kinds of
insurance in this state. Additionally, each member of the group shall make available
to the commissioner an annual certification of the member's solvency by the
member's domiciliary regulator and its independent public accountant.
(d) (Deleted by amendment, L. 95, p. 493, � 13, effective May 16, 1995.)
(2) A surplus line broker who places insurance with a nonadmitted insurance
company that does not comply with this article is subject to a penalty of up to ten
thousand dollars as determined by the commissioner and the surplus line broker's
license may be revoked.