Utah Admin. Code 590-171-7

Current through Bulletin 2024-19, October 1, 2024

Section R590-171-7 - Conditions for Marketing Insurance with a Surplus Lines Insurer

A producer may not solicit business on behalf of a surplus lines insurer except as allowed in this section.

(1) A producer may advertise the availability of an insurance product for the insurance coverages and classes included on the export list to potential insureds and other producers.

(2)

(a) A surplus lines producer may advertise its services and product lines to other producers.

(b) A surplus lines producer advertisement:

(i) shall identify that the insurance will be placed with a surplus lines insurer;

(ii) may not identify the insurer by name;

(iii) may not act as a solicitation on behalf of any surplus lines insurer; and

(iv) may not identify specific rates or specific policy provisions.

(3) Once negotiations over the available terms and conditions for specific coverages and classes begin, the producer shall disclose, in writing, to the potential insured:

(a) that the insurance will be placed through a surplus lines insurer;

(b) the name of the insurer;

(c) that the producer is not a producer of the potential insurer because surplus lines insurers are not permitted to appoint producers;

(d) that the surplus lines market is a specialty market with limited regulatory oversight by the commissioner, and specifically, there is no regulation of policy coverage forms or rates; and

(e) that no protection is given under any Utah guaranty fund association.

(4) Subject to Section 31A-23a-501, a surplus lines producer may:

(a) originate surplus lines insurance;

(b) accept an application for surplus lines insurance from a producer licensed as to the kinds of insurance involved; and

(c) compensate the originating producer involved in the transaction.

(5)

(a) Only the portion of a risk that is unacceptable to the admitted market may be placed with a surplus lines insurer.

(b) If it is not possible to obtain the full amount of insurance required by segmenting the risk, or if the only portion that the admitted market will write is incidental to the principal elements of coverage, it is permissible to place the full amount with a surplus lines insurer.

(c) If a full amount is placed with a surplus lines insurer under Subsection (5)(b), an explanation shall be provided in the submission documentation outlined in Section R590-171-8.

Utah Admin. Code R590-171-7

Amended by Utah State Bulletin Number 2024-03, effective 1/24/2024