The Connecticut Insurance Department recently sent a "market conduct examination survey" to many insurance companies, including some surplus lines companies. The survey required the companies to respond to 48 separate questions by Aug 11, 2006.
Many of the questions appeared to be applicable only to an admitted company so NAPSLO has asked the Insurance Department to clarify whether they intended to send it to surplus lines companies as well. The Department has confirmed that, in its view, the survey applies to surplus lines companies.
In response to Connecticut’s confirmation, NAPSLO has submitted a letter objecting that the survey should not apply to surplus lines companies; that many of the survey questions are tailored to admitted companies, and that surplus lines companies are more appropriately examined by their state of domicile.
NAPSLO explained that the surplus lines laws generally regulate brokers (not companies) and the Connecticut laws specifically state that surplus lines companies are not considered to be "doing business" in the state.
It is not clear why Connecticut decided to submit the market conduct surveys to surplus lines companies, when they are traditionally examined only by the state of domicile. A copy of NAPSLO's letter may be downloaded from the NAPSLO web site.