§ 5027. Evidence of the insurance; changes; penalty

(a) Where Vermont is the home state of the insured, the surplus lines broker, upon placing a domestic risk with a surplus lines insurer, shall promptly deliver to the insured the policy issued by the surplus lines insurer, or if such policy is not then available, a certificate, cover note, or other confirmation of insurance, showing the description and location of the subject of the insurance, coverage, conditions and term of the insurance, the premium and rate charged and taxes collected from the insured, and the name and address of the insured and surplus lines insurer. If the risk is assumed by more than one insurer, the document or documents shall state the name and address and proportion of the entire risk assumed by each insurer.

(b) No surplus lines broker shall issue or deliver such policy or such confirmation of insurance or represent that insurance will be or has been written by any non-admitted surplus lines insurer unless he or she has written authority from the surplus lines insurer to assume the risk or has received confirmation from the surplus lines insurer in the regular course of business that such insurance has been granted.

(c) If, after delivery of any such document, there is any change in the identity of the insurers, the proportion of the risk assumed by any insurer, or any other material change in coverage evidenced by an appropriate document, the surplus lines broker shall promptly deliver to the insured an appropriate substitute for, or endorsement of the original document, accurately showing the current status of the coverage and the insurers responsible thereunder. The document as modified and issued must conform to all the requirements of this chapter, and any such change resulting in a violation of this chapter is prohibited.

(d) As soon as reasonably possible, and in no event later than 60 days after placement of any such insurance, the surplus lines broker shall procure from the insurer a full and properly executed policy and deliver it to the insured to replace any confirmation previously issued. The word "policy," as used in this section, shall include a certificate of insurance or cover note bound under a fully executed and effective contract from a bona fide intermediary or general agent for a surplus lines insurer, provided that it contains or has attached to it all insuring agreements, clauses, conditions, endorsements, exclusions, or any other material provisions that would regularly be included in such a policy.

(e) Any surplus lines broker who fails to comply with the requirements of this section shall be subject to the penalties provided in this chapter. (Added 1979, No. 50, § 2; amended 1979, No. 197 (Adj. Sess.), § 5; 2001, No. 97 (Adj. Sess.), § 19; 2011, No. 49, § 6, eff. May 26, 2011.)