Thursday, April 22, 2010

Louisiana House passes bill exempting surpus lines from rates and forms

Louisiana House Bill 285 by Rep. J. Kevin Pearson, which exempts surplus lines from filing rates and forms, has passed the state's House of Representatives.

The bill passed the House 83-0 and was forwarded to the Senate. The bill would exempt surplus lines insurance delivered by approved unauthorized insurers from laws regarding form and rate filing and approval.

HB 285 attempts to clarify the role of surplus lines insurance as complimentary to the "admitted market," while at the same time conserving the full regulatory authority of the Commissioner of Insurance over the surplus lines industry as granted by the Louisiana Insurance Code.

Surplus lines companies must meet strict eligibility and financial requirements of the insurance department before they can be approved to write in Louisiana. Once approved, they are placed on a list known as the "white list." Companies may be removed from the white list at any time, if they fail to meet the eligibility requirements, or the department feels they are not acting in the best interest of the insured, according to the LSLA.

David Tatman, a representative for the Louisiana Surplus Lines Association that between 2004 and 2006, in response to withdrawal from the market by admitted insurers, the surplus lines industry increased writings in Louisiana by 40 percent, according to tax figures provided by the insurance department.

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