(A) At the request of a licensed resident broker, the director or his designee may approve certain nonadmitted insurers as eligible surplus lines insurers to write business on risks located in this State that one or more insurers licensed in this State to write that line of business in this State have declined to write. The director or his designee may require the broker to submit, on behalf of the insurer, documents necessary to satisfy him that the insurer is licensed in his domiciliary state, that meets at least the minimum capital and surplus requirements of this State, and that its operation is not hazardous to the policyholders. The director or his designee may require the broker or the insurer to file additional documents at any time to maintain the insurer's status as an eligible surplus lines insurer. For the purposes of this section, "domiciliary state" means the state or jurisdiction in which an insurer is incorporated or organized. The director or his designee may withdraw his approval at any time the insurer fails to meet any of the requirements. While the insurer maintains his status as an eligible surplus lines insurer, a duly licensed broker, under the terms of this chapter, may place business with the insurer. An insurance broker shall exercise due care in the placing of insurance, except as provided in subsection (B). Each broker transacting business in the State during a calendar year shall file annually with the department within thirty days after December thirty-first a detailed report of this business. The report must be in the form the director or his designee prescribes. The broker's books, papers, and accounts must be open at all times to the inspection of the director or his designee.

(B) A surplus lines broker is not required to search with due diligence to determine whether the full amount or type of insurance can be obtained from an admitted insurer when the broker is seeking to procure or place nonadmitted insurance for an exempt commercial purchaser provided the:

(1) broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that the insurance may or may not be available from the admitted market and that insurance obtained from the admitted market may provide greater protection with more regulatory oversight; and

(2) exempt commercial purchaser has subsequently requested in writing for the broker to procure or place such insurance from a nonadmitted insurer.

HISTORY: Former 1976 Code Section 38-45-90 [1947 (45) 322; 1952 Code Section 37-809; 1962 Code Section 37-809] recodified as Section 38-17-90 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-47-100 [1947 (45) 322; 1952 Code Section 37-209; 1962 Code Section 37-209; 1981 Act No. 13, Section 1] recodified as Section 38-45-90 by 1987 Act No. 155, Section 1; 1988 Act No. 314, Section 7; 1993 Act No. 181, Section 672; 1998 Act No. 411, Section 4; 2008 Act No. 326, Section 14, eff June 16, 2008; 2012 Act No. 283, Section 1, eff January 1, 2012; 2013 Act No. 66, Section 1, eff June 13, 2013.