Friday, November 08, 2013

Pennsylvania Reduces Required Documentation to be Eligible Insurer, Allows Diligent Search Declaration/Affidavit to be Electronically Signed

The Pennsylvania Department of Insurance issued notice on October 26 that it has updated 31 PA. Code Ch. 124, their Surplus Insurance Lines regulation. In general, these changes are non-substantive and serve to update the regulation to reflect current practice and procedures as well as some editorial changes. Some changes reflect further implementation of the NRRA.

Of particular interest is the change to reduce required documentation for foreign insurers to demonstrate eligibility. The Pennsylvania Department will rely more on information available through the NAIC ISITE system. In addition to their Certificate of Authority, foreign insurers only need to submit their jurat page to the Department, rather than the entire financial statement and supporting documentation. The Department continues to be able to ask for additional information from the insurer if the Department cannot determine if the eligibility criteria has been established from the jurat page. The jurat page will also be sufficient for foreign insurers already on the Department’s eligibility list, unless the Department determines from the jurat that additional information is needed. Alien insurers should provide written request along with evidence demonstrating they are listed on the NAIC’s Quarterly Listing of Alien Insurers.

Additionally of note are changes related to diligent search efforts. The updated code clarifies how a writing producer should document the diligent search effort in the placement of a policy. At the beginning of the year, the PASLA issued a Bulletin stating the three required declinations do not need to be recorded on the required 1609-PR form. On July 23, 2013 the Pennsylvania Surplus Lines Association issued a Bulletin announcing that the required diligent search effort form 1609-PR now may be electronically signed.
The changes also codify the prior elimination of the bond requirement.

A final revision of note is the change in procedures for filing notice of placement of an exported coverage using form 1604-E in lieu of providing specific documentation.

It is important to note these changes do not go into effect for 30 days from the publication of the notice and the PASLA and Department request you continue under current requirements until then.

For current versions of the required forms, additional information and questions, contact or visit the PASLA or the Pennsylvania Insurance Department