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10 61 Chapter 11 SURPLUS LINES AND INSURANCE IN UNAUTHORIZED INSURERS 61 Section 526-11-10126-11-1015. "Surplus Line Law." 526-11-10226-11-1025. Exemptions from provisions. 526-11-10326-11-1035. "Broker" and "Export." 526-11-10426-11-1045. Conditions for procurement of coverage. 526-11-10526-11-1055. Broker's affidavit. 526-11-10626-11-1065. Eligibility for export by commissioner's order. 526-11-10726-11-1075. Eligible surplus lines insurers. 526-11-10826-11-1085. Evidence of coverage; broker's certificate. 526-11-10926-11-1095. Identification and notice on contract. 526-11-11026-11-1105. Enforceability of contracts. 526-11-11126-11-1115. Insurer's liability for losses and unearned premiums. 526-11-11226-11-1125. Surplus line broker's license. 526-11-11326-11-1135. License suspension or revocation. 526-11-11426-11-1145. Broker's surety bond. 526-11-11526-11-1155. Business with agents. 526-11-11626-11-1165. Record or procured coverages. 526-11-11726-11-1175. Annual statement of business transacted. 526-11-11826-11-1185. Premium tax. 526-11-11926-11-1195. Failure to file statement or pay tax. 526-11-12026-11-1205. Actions against insurer; service of process. 526-11-12126-11-1215. Rules and regulations. 526-11-12226-11-1225. Disclosure by insured. 20 426-11-10126-11-101.4 7``Surplus Line Law'' 7 This chapter constitutes and may be cited as the ``Surplus Line Law.'' History.-- Laws 1967, ch. 136, 208; W.S. 1977, 526-11-10126-11-1015; Laws 1983, ch. 190, 1. 20 21 426-11-10226-11-102.4 7Exemptions from provisions. 7 426-11-102(a)(a)4 This chapter does not apply to reinsurance or to the following insurances when placed by licensed agents or surplus line brokers of this state: 426-11-102(a)(i)(i)4 Wet marine and transportation insurance; 426-11-102(a)(ii)(ii)4 Insurance on subjects located, resident or to be performed wholly outside of this state, or on vehicles or aircraft owned and principally garaged outside this state; 426-11-102(a)(iii)(iii)4 Insurance on operations of railroads engaged in transportation in interstate commerce and their property used in those operations; 426-11-102(a)(iv)(iv)4 Insurance on aircraft owned or ope rated by manufacturers of aircraft, or on aircraft operated in commercial interstate flight, or cargo of that aircraft, or against liability, other than worker's compensation and employer's liability, arising out of the ownership, maintenance or use of that aircraft. History.-- Laws 1967, ch. 136, 209; W.S. 1977, 526-11-10226-11-1025; Laws 1983, ch. 190, 1. Note.-- There is no subsection (b). 21 22 426-11-10326-11-103.4 7``Broker'' and ``export'' 7 426-11-103(a)(a)4 As used in this chapter: 426-11-103(a)(i)(i)4 ``Broker'' means a surplus line broker licensed as such under this chapter; 426-11-103(a)(ii)(ii)4 ``Export'' means to place in an unauthorized insurer under this surplus line law insurance covering a subject of insurance resident, located or to be performed in Wyoming. History.-- Laws 1967, ch. 136, 210; W.S. 1977, 526-11-10326-11-1035; Laws 1983, ch. 190, 1. Note.-- There is no subsection (b). 22 23 426-11-10426-11-104.4 7Conditions for procurement of coverage 7 426-11-104(a)(a)4 If certain insurance coverages cannot be procured from authorized insurers, those coverages, designated in this chapter as 526-11-101``surplus lines,''5 may be procured from unauthorized insurers, subject to the following conditions: 426-11-104(a)(i)(i)4 The insurance shall be procured through a licensed surplus line broker; 426-11-104(a)(ii)(ii)4 The full amount of insurance required is not procurable, after diligent effort has been made to do so, from among the insurers authorized to transact and actually writing that kind and class of insurance in this state, and the amount of insurance exported shall be only the excess over the amount procurable from authorized insurers; 426-11-104(a)(iii)(iii)4 The insurance shall not be exported for the purpose of securing advantages either as to: 426-11-104(A)(A)4 A lower premium rate that would be accepted by an authorized insurer; or 426-11-104(B)(B)4 Terms of the insurance contract. History.-- Laws 1967, ch. 136, 211; W.S. 1977, 526-11-10426-11-1045; Laws 1983, ch. 190, 1. Note.-- There is no subsection (b). 23 24 426-11-10526-11-105.4 7Broker's affidavit 7 At the time of effecting any surplus line insurance the broker shall execute an affidavit in a form the commissioner prescribes or accepts, setting forth facts from which it can be determined whether the insurance is eligible for export under W.S. 526-11-10426-11-1045. The broker shall file this affidavit with the commissioner within thirty (30) days after the insurance is effected. History.-- Laws 1967, ch. 136, 212; W.S. 1977, 526-11-10526-11-1055; Laws 1983, ch. 190, 1. 24 25 426-11-10626-11-106.4 7Eligibility for export by commissioner's order 7 426-11-106(a)(a)4 The commissioner, by order, may declare eligible for export generally and without compliance with W.S. 526-11-104(a)(i)26-11-104 (a)(i)5 and 526-11-10526-11-1055, any class of insurance coverage or risk for which he finds, after a hearing of which notice is given to each insurer authorized to transact those classes in this state, that there is not a reasonable or adequate market among authorized insurers either as to acceptance of the risk, contract terms, premium or premium rate. The order shall continue in effect during the existence of the conditions upon which predicted, but subject to the commissioner's earlier termination. 426-11-106(b)(b)4 The broker shall file with or as directed by the commissioner a memorandum as to each coverage he places in an unauthorized insurer, in such form and context as the commissioner requires for the identification of the coverage and determination of the tax payable to the state relative thereto. 426-11-106(c)(c)4 The broker, or a licensed Wyoming agent of the authorized insurer or a broker, may also place with authorized insurers any insurance coverage made eligible for export generally under subsection 526-11-106(a)(a)5 of this section and without regard to rate or form filings which may otherwise be applicable to the authorized insurer. As to coverages placed in an authorized insurer, the premium tax thereon shall be reported and paid by the insurer as required generally under W.S. 526-4-10326-4-1035. History.-- Laws 1967, ch. 136, 213; W.S. 1977, 526-11-10626-11-1065; Laws 1983, ch. 190, 1. 25 26 426-11-10726-11-107.4 7Eligible surplus lines insurers 7 426-11-107(a)(a)4 No broker shall knowingly place surplus line insurance with an insurer that is unsound financially or that is ineligible under this section. The broker shall ascertain the financial condition of the unauthorized insurer, to the extent that the financial condition is shown by the insurer's recent financial statements filed with public authority or published, or as otherwise known to the broker, before placing insurance with that insurer. 426-11-107(b)(b)4 The broker shall insure only in an insurer which meets the following requirements: 426-11-107(b)(i)(i)4 Is authorized to transact insurance of the kind involved in at least one (1) state of the United States and has unimpaired capital or surplus, or both, or an effective trust fund amounting to at least five hundred thousand dollars ($500,000.00); 426-11-107(b)(ii)(ii)4 If an alien insurer not authorized to transact insurance in at least one (1) state of the United States, has an established and effective trust fund of at least five hundred thousand dollars ($500,000.00) within the United States administered by a recognized financial institution and held for the benefit of all its policyholders in the United States; or 426-11-107(b)(iii)(iii)4 Is in compliance with either paragraph 526-11-107(b)(i)(i)5 or 526-11-107(b)(ii)(ii)5 and is not ineligible as a surplus line insurer by the commissioner's order received by or known to the broker. 426-11-107(c)(c)4 The commissioner may issue an order of ineligibility if he finds or has reason to believe that the insurer: 426-11-107(c)(i)(i)4 Does not meet the requirements of this section; 426-11-107(c)(ii)(ii)4 Has without just cause refused to pay claims arising under its contracts in the United States; or 426-11-107(c)(iii)(iii)4 Has otherwise conducted its affairs in such manner as to result in or threaten injury or loss to the insuring public of the United States. 426-11-107(c)(d)4 The commissioner from time to time may publish a list of all surplus lines insurers he deems eligible currently and shall mail a copy of the list to each broker at his office last of record with the commissioner. This subsection does not obligate the commissioner to determine the actual financial condition or claims practices of any unauthorized insurer. The status of eligibility, if granted by the commissioner, indicates only that the insurer appears to be sound financially and to have satisfactory claims practices, and that the commissioner has no credible evidence to the contrary. While any such list is in effect the broker shall restrict to the insurers listed all surplus line business he places. History.-- Laws 1967, ch. 136, 214; W.S. 1977, 526-11-10726-11-1075; Laws 1983, ch. 190, 1. 26 27 426-11-10826-11-108.4 7Evidence of coverage; broker's certificate 7 426-11-108(a)(a)4 Upon placing a surplus line coverage, the broker shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer, or, if the policy is not then available, the surplus line broker's certificate. The certificate shall be executed by the broker and shall show the description and location of the subject of the insurance, coverage, conditions and term of the insurance, the premium and rate charged, taxes collected from the insured and the name and address of the insured and insurer. If more than one (1) insurer assumes the direct risk, the certificate shall state the name and address of each insurer and the proportion of the entire direct risk each assumes. 426-11-108(b)(b)4 No broker shall issue any certificate or any cover note or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless he has: 426-11-108(b)(i)(i)4 The insurer's prior written authority for the insurance; 426-11-108(b)(ii)(ii)4 Received information from the insurer in the regular course of business that the insurance has been granted; or 426-11-108(b)(iii)(iii)4 Received an insurance policy specifying the insurer has actually issued the insurance and delivered it to the insured. 426-11-108(c)(c)4 If after the issuance and delivery of any certificate there is any change as to the insurer's identity, or the proportion of the direct risk an insurer assumes as stated in the broker's original certificate, or in any other material respect as to the insurance evidenced by the certificate, the broker shall promptly issue and deliver to the insured a substitute certificate accurately showing the current status of the coverage and the insurers responsible thereunder. 426-11-108(d)(d)4 If a policy issued by the insurer is not available upon placement of the insurance and the broker has is sued and delivered his certificate as provided in this section, upon the insured's request therefor, the broker, as soon as reasonably possible, shall procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the broker's certificate. 426-11-108(a)(e)4 Any surplus line broker who knowingly or negligently issues a false certificate of insurance, or who fails promptly to notify the insured of any material change with respect to the insurance by delivery to the insured of a substitute certificate as provided in subsection 526-11-108(c)(c)5 of this section, upon conviction, is subject to the penalty provided by W.S. 26-1-107 or to any greater applicable penalty otherwise provided by law. History.-- Laws 1967, ch. 136, 215; W.S. 1977, 526-11-10826-11-1085; Laws 1983, ch. 190, 1. 27 28 426-11-10926-11-109.4 7Identification and notice on contract 7 Any insurance contract procured and delivered as a surplus line coverage pursuant to this chapter shall have stamped upon it, initialed by or bearing the name of the surplus line broker who procured it, the following: ``This insurance contract is issued pursuant to the Wyoming Insurance Laws by an insurer neither licensed by nor under the jurisdiction of the Wyoming Insurance Department. '' History.-- Laws 1967, ch. 136, 216; W.S. 1977, 526-11-10926-11-1095; Laws 1983, ch. 190, 1. 28 29 426-11-11026-11-110.4 7Enforceability of contracts 7 Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this chapter are fully valid and enforceable as to all parties and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers. History.-- Laws 1967, ch. 136, 217: W.S. 1977, 526-11-11026-11-1105; Laws 1983, ch. 190, 1. 29 210 426-11-11126-11-111.4 7Insurer's liability for losses and unearned premiums 7 426-11-111(a)(a)4 As to surplus line risk which is assumed by an unauthorized insurer pursuant to this chapter, and if the premium the reon is received by the surplus line broker who placed the insurance, in all questions thereafter arising under the coverage as between the insurer and the insured the insurer is deemed to have received the premium due to it for that coverage. The insurer is liable to the insured for losses covered by the insurance and for unearned premiums which are payable to the insured upon cancellation of the insurance, whether or not the broker is indebted to the insurer with respect to the insurance or for any other cause. 426-11-111(b)(b)4 Each unauthorized insurer assuming a surplus line risk under this chapter subjects itself to the terms of this section. History.-- Laws 1967, ch. 136, 218; W.S. 1977, 526-11-11126-11-1115; Laws 1983, ch. 190, 1. 210 211 426-11-11226-11-112.4 7Surplus line broker's license 7 426-11-112(a)(a)4 Any person may be licensed as a surplus line broker if: 426-11-112(a)(i)(i)4 He is licensed in this state as a resident general lines agent; 426-11-112(a)(ii)(ii)4 The commissioner deems him to be competent and trustworthy with respect to the handling of surplus lines; and 426-11-112(a)(iii)(iii)4 He maintains an office at a designated location in this state. 426-11-112(b)(b)4 Application for the license shall be made to the commissioner on forms he designates and furnishes. 426-11-112(c)(c)4 The license fee shall be as specified in W.S. 26-4-101. 426-11-112(d)(d)4 The license and licensee are subject to the applicable provisions of chapter 9 of this code {Title 26}. History.-- Laws 1967, ch. 136, 219; W.S. 1977, 526-11-11226-11-1125; Laws 1983, ch. 190, 1. 211 212 426-11-11326-11-113.4 7License suspension or revocation 7 426-11-113(a)(a)4 The commissioner may suspend or revoke any surplus line broker's license: 426-11-113(a)(i)(i)4 If the broker: 426-11-113(A)(A)4 Fails to file his annual statement or to remit the tax required by this code {Title 26}; 426-11-113(B)(B)4 Fails to maintain an office in this state; 426-11-113(C)(C)4 Fails to keep the records, or to allow the commissioner to examine his records, as required by this law; 426-11-113(D)(D)4 Removes his records from the state; or 426-11-113(E)(E)4 Knowingly or negligently places a surplus line coverage in an insurer that is in unsound financial condition in violation of W.S. 526-11-10726-11-1075. 426-11-113(E)(ii)(ii)4 For any other applicable cause for which a general lines agent's license may be suspended or revoked. 426-11-113(b)(b)4 The procedures provided by chapter 9 of this code for suspension or revocation of licenses apply to suspension or revocation of a surplus line broker's license. 426-11-113(c)(c)4 Upon suspending or revoking the broker's surplus line license, the commissioner shall also suspend or revoke all other licenses of or as to the same individual under this code. 426-11-113(d)(d)4 No broker whose license is suspended or revoked shall again be licensed until any fines or delinquent taxes he owes are paid, or, in case of revocation, until after expiration of one (1) year from the date revocation is final. History.-- Laws 1967, ch. 136, 220; W.S. 1977, 526-11-11326-11-1135; Laws 1983, ch. 190, 1. 212 213 426-11-11426-11-114.4 7Broker's surety bond 7 Prior to issuance of a license as a surplus line broker, the applicant shall file with the commissioner and thereafter for as long as the license remains in effect shall keep in force a bond in favor of the state of Wyoming in the penal sum of one thousand dollars ($1,000.00), with an authorized corporate surety the commissioner approves, conditioned that he will conduct business under the license in accordance with this chapter and that he will promptly remit the taxes provided by W.S. 526-11-11826-11-1185. The aggregate liability of the surety for any claims on the bond shall not exceed the penal sum of the bond. The bond shall not be terminated unless not less than thirty (30) days prior written notice thereof is given to the licensee and filed with the commissioner. History.-- Laws 1967, ch. 136, 221; W.S. 1977, 526-11-11426-11-1145; Laws 1983, ch. 190, 1. 213 214 426-11-11526-11-115.4 7Business with agents 7 A licensed surplus line broker may accept and place surplus line business for any insurance agent licensed in this state for the kind of insurance involved and may compensate the agent therefor. History.-- Laws 1967, ch. 136, 222; W.S. 1977, 526-11-11526-11-1155; Laws 1983, ch. 190, 1. 214 215 426-11-11626-11-116.4 7Record of procured coverages 7 426-11-116(a)(a)4 Each broker shall keep in his office in this state a full and true record of each surplus line coverage he procures, including a copy of each daily report, if any, a copy of each certificate of insurance he issues and any of the following applicable items: 426-11-116(a)(i)(i)4 Amount of the insurance; 426-11-116(a)(ii)(ii)4 Gross premium charged; 426-11-116(a)(iii)(iii)4 Return premium paid, if any; 426-11-116(a)(iv)(iv)4 Rate of premium charged upon the several items of property; 426-11-116(a)(v)(v)4 Effective date of contract and the terms thereof; 426-11-116(a)(vi)(vi)4 Name and address of each insurer on the direct risk and the proportion of the entire risk assumed by each insurer if less than the entire risk; 426-11-116(a)(vii)(vii)4 Name and address of the insured; 426-11-116(a)(viii)(viii)4 Brief general description of the property or risk insured and where located or to be performed; and 426-11-116(a)(ix)(ix)4 Any other information the commissioner requires. 426-11-116(b)(b)4 The record shall not be removed from this state and is open to examination by the commissioner at all times within five (5) years after issuance of the coverage to which it relates. History.-- Laws 1967, ch. 136, 223; W.S. 1977, 526-11-11626-11-1165; Laws 1983, ch. 190, 1. 215 216 426-11-11726-11-117.4 7Annual statement of business transacted 7 426-11-117(a)(a)4 Each broker, annually, on or before March 1, shall file with the commissioner a verified statement of all surplus line insurance he transacted during the preceding calendar year. 426-11-117(b)(b)4 The statement shall be on forms the commissioner prescribes and furnishes and shall show: 426-11-117(b)(i)(i)4 Gross amount of each kind of insurance transacted; 426-11-117(b)(ii)(ii)4 Aggregate gross premiums charged; 426-11-117(b)(iii)(iii)4 Aggregate of returned premiums paid to insureds; 426-11-117(b)(iv)(iv)4 Aggregate of net premiums; and 426-11-117(b)(v)(v)4 Additional information the commissioner requires. History.-- Laws 1967, ch. 136, 224; W.S. 1977, 526-11-11726-11-1175; Laws 1983, ch. 1. 216 217 426-11-11826-11-118.4 7Premium tax 7 426-11-118(a)(a)4 Annually, on or before March 1, each broker shall remit to the commissioner a tax at the rate of three percent (3%) on the premiums, less the amount of return premium on cancelled policies, including sums collected to cover federal and state taxes on surplus line insurance, subject to tax, transacted with unauthorized insurers during the preceding calendar year as shown by his annual statement filed with the commissioner. 426-11-118(b)(b)4 If a surplus line policy covers risks or exposures only partially in this state, the tax payable shall be computed upon the proportion of the premium which is properly allocable to the risks or exposure located in this state. History.-- Laws 1967, ch. 136, 225; Laws 1971, ch. 57, 1; Laws 1977, ch. 24, 1; W.S. 1977, 526-11-11826-11-1185; Laws 1983, ch. 190, 1. 217 218 426-11-11926-11-119.4 7Failure to file statement or pay tax 7 If any broker fails to file his annual statement, or fails to remit the tax provided by W.S. 526-11-11826-11-1185, prior to April 1 after the tax is due, and if in the commissioner's opinion the failure is without just cause, the broker is liable for a twenty-five dollar ($25.00) fine for each day of delinquency commencing with April 1. The tax may be collected by distraint, or the tax and fine may be recovered by an action the commissioner institutes in any court of competent jurisdiction. History.-- Laws 1967, ch. 136, 226; W.S. 1977, 526-11-11926-11-1195; Laws 1983, ch. 190, 1. 218 219 426-11-12026-11-120.4 7Actions against insurer; service of process 7 426-11-120(a)(a)4 An unauthorized insurer shall be sued, upon any cause of action arising in this state under contract it issues as a surplus line contract pursuant to this chapter, in the district court of the county in which the cause of action arises. 426-11-120(b)(b)4 Legal process against the insurer in any action specified in subsection 526-11-120(a)(a)5 of this section may be served upon the commissioner as provided in W.S. 526-11-12226-3-1225. The commissioner shall immediately mail a copy of the process served to the person the insurer designates in the policy for that purpose, by prepaid registered or certified mail with return receipt requested. After service of process upon the commissioner in accordance with this section, the court has jurisdiction in personam of the insurer. 426-11-120(c)(c)4 An unauthorized insurer issuing a policy is deemed to have authorized service of process against it in the manner and to the effect provided in this section. The policy shall contain a provision stating the substance of this section and designating the person to whom the commissioner shall mail process as provided in subsection 526-11-120(b)(b)5 of this section. History.-- Laws 1967, ch. 136, 227; W.S. 1977, 526-11-12026-11-1205; Laws 1983, ch. 190, 1. 219 220 426-11-12126-11-121.4 7Rules and regulations 7 426-11-121(a)(a)4 The commissioner shall make or may approve and adopt reasonable rules and regulations, consistent with this chapter, for any of the following purposes: 426-11-121(a)(i)(i)4 Carrying out of this chapter; 426-11-121(a)(ii)(ii)4 Establishment of procedures through which eligibility of particular proposed coverages for export is determined; and 426-11-121(a)(iii)(iii)4 Establishment, procedures and operations of any voluntary organization of brokers or others designed to assist those brokers to comply with this chapter. 426-11-121(b)(b)4 The rules and regulations are subject to the procedures and carry the penalty provided by W.S. 26-2-110. History.-- Laws 1967, ch. 136, 228; W.S. 1977, 526-11-12126-11-1215; Laws 1983, ch. 190, 1. 220 221 426-11-12226-11-122.4 7Disclosure by insured 7 Any person for whom insurance is placed with an unauthorized insurer, upon the commissioner's order, shall produce for his examination all policies and other documents evidencing the insurance and shall disclose to the commissioner the amount of gross premiums paid or agreed to be paid for the insurance. If the person refuses to obey the commissioner's order, he is subject to the penalties provided by W.S. 526-11-10726-1-1075 for each refusal. History.-- Laws 1967, ch. 136, 230; W.S. 1977, 526-11-12226-11-1225; Laws 1983, ch. 190, 1. 221 10 
