Utah Admin. Code 590-171-6

Current through Bulletin 2024-19, October 1, 2024

Section R590-171-6 - Conditions for Placing Insurance with a Surplus Lines Insurer

Placement of insurance with a surplus lines insurer is subject to Subsections (1) through (3). All information relating to the placement of insurance pursuant to Section 31A-15-103 shall be made available to the commissioner upon request.

(1) Insurance coverages and classes included on the export list may be placed with a surplus lines insurer.

(2)

(a) Insurance coverages and classes not included on the export list may be placed with a surplus lines insurer only if:

(i) a good faith effort is made to place the insurance with an admitted insurer that the producer believes will write the type of coverage or class of insurance involved consistent with the following:

(A) the insurance cannot be obtained due to underwriting reasons, or the insured requires specific terms and conditions of coverage that are unavailable through an admitted insurer;

(B) placement with a surplus lines insurer solely to obtain a better price does not constitute good faith unless the producer demonstrates that the price quoted by the admitted market is excessive under Subsection 31A-19a-201(2); and

(C) the inability to place insurance through an admitted insurer with whom the producer has an established relationship is not an exception to the obligation to place the insurance with an admitted insurer; and

(ii) the producer documents the good faith efforts made to place the insurance with an admitted insurer.

(b)

(i) The good faith effort documentation in Subsection (2)(a)(ii) shall include a record of the efforts made to place the insurance together with a written explanation confirming that the effort is made in good faith.

(ii) The good faith effort documentation shall be maintained in the surplus lines producer's and the originating producer's files for at least three years from the inception date of coverage or renewal.

(3) An exempt commercial purchaser may purchase commercial insurance from the surplus market.

Utah Admin. Code R590-171-6

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