Montana Code 33-2-302. Home state exclusive authority — conditions precedent to sale of surplus lines insurance
33-2-302. Home state exclusive authority — conditions precedent to sale of surplus lines insurance. (1) Pursuant to the Nonadmitted and Reinsurance Reform Act of 2010, Title V, subtitle B, of Public Law 111-203, the transaction of surplus lines insurance is subject to the statutory and regulatory requirements of the home state of the insured, regardless of whether a multistate risk is covered. If, at the time of the surplus lines insurance transaction, the home state:
Terms Used In Montana Code 33-2-302
- Approved risk list: means the list approved by the commissioner of the kinds of insurance presumed unobtainable from authorized insurers when Montana is the home state of the insured. See Montana Code 33-2-301
- Authorized insurer: means an insurer authorized pursuant to 33-2-101 to transact insurance in this state. See Montana Code 33-2-301
- Contract: A legal written agreement that becomes binding when signed.
- Eligible surplus lines insurer: means an unauthorized insurer that is eligible to issue surplus lines insurance under 33-2-307. See Montana Code 33-2-301
- Exempt commercial purchaser: has the meaning provided in 33-2-318. See Montana Code 33-2-301
- Home state: means , with respect to an insured:
(i)the state in which the insured maintains its principal place of business or, in the case of an individual, the individual's principal residence;
(ii)if 100% of the insured risk is located outside the state referred to in subsection (3)(k)(i), the state with the greatest allocated percentage of the insured's taxable premium for that surplus lines insurance contract;
(iii)if more than one insured from an affiliated group are named insureds on a single surplus lines insurance contract, the home state as determined under subsection (3)(k)(i) or (3)(k)(ii) for the member of the affiliated group that has the largest percentage of premium attributed to it under the surplus lines insurance contract; or
(iv)if a group policyholder pays 100% of the premium from its own funds, the home state of the group policyholder as determined under subsection (3)(k)(i) or, if a group policyholder does not pay 100% of the premiums from its own funds, the home state of the group member as determined under subsection (3)(k)(i). See Montana Code 33-2-301
- Multistate risk: means a risk covered by an unauthorized insurer with insured exposures in more than one state. See Montana Code 33-2-301
- Natural disaster multiperil insurance: means any combination of flood, earthquake, and landslide insurance that may be sold as surplus lines insurance. See Montana Code 33-2-301
- Oversight: Committee review of the activities of a Federal agency or program.
- Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
- Producing insurance producer: means a Montana-licensed property and casualty insurance producer dealing directly with a person seeking insurance. See Montana Code 33-2-301
- Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
- State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. See Montana Code 33-2-301
- Surplus lines insurance: means any property, casualty, or inland marine insurance permitted in a state to be placed directly or through a surplus lines insurance producer with an unauthorized insurer eligible to accept the insurance. See Montana Code 33-2-301
- Surplus lines insurance producer: means an individual or business entity licensed under 33-2-305 to place surplus lines insurance on risks resident, located, or to be performed in this state with unauthorized insurers eligible to accept the insurance. See Montana Code 33-2-301
- Unauthorized insurer: means , with respect to a state, an insurer not authorized to transact the business of insurance in the state. See Montana Code 33-2-301
- Writing: includes printing. See Montana Code 1-1-203
(a)is Montana, the surplus lines insurance transaction is subject to the applicable statutory and regulatory requirements in Montana; or
(b)is not Montana, the Montana statutory and regulatory requirements regarding the surplus lines insurance transaction are preempted by the statutory and regulatory requirements of the home state.
(2)When Montana is the home state at the time of the surplus lines insurance transaction, the following apply:
(a)A producing insurance producer may request a surplus lines insurance producer to place or a surplus lines insurance producer may place a contract of insurance with an unauthorized insurer if:
(i)the insurer is an eligible surplus lines insurer;
(ii)the line of insurance or the full amount of the line of insurance cannot be obtained from authorized insurers or, in the case of a renewal, the line of insurance has not become available from an authorized insurer, as evidenced by one of the following:
(A)the producing insurance producer making a diligent effort to place the business with a minimum of three insurers authorized and actually transacting that line of business in this state. If fewer than three insurers are authorized and actually transacting the line of business in this state, diligent effort must be met by searching this lesser market.
(B)the appearance on the current approved risk list of the kind of insurance being sought; or
(C)the insurance is natural disaster multiperil insurance; and
(iii)all other requirements of this part are met.
(b)A producing insurance producer is not required to satisfy the search requirements in subsection (2)(a)(ii) if:
(i)the premium rate quoted by an authorized insurer is at least 10% higher than the premium rate quoted by an unauthorized insurer;
(ii)the unauthorized insurer is eligible under 33-2-307; and
(iii)the unauthorized insurer or the surplus lines insurance producer that placed the contract of insurance with the unauthorized insurer has provided the insured with disclosure information in a form and content approved by the commissioner.
(c)A producing insurance producer is not required to satisfy the search requirements in subsection (2)(a)(ii) if:
(i)the insured is an exempt commercial purchaser;
(ii)the producing insurance producer placing the coverage has disclosed to the exempt commercial purchaser that the insurance may or may not be available from an authorized insurer that may provide greater protection with more regulatory oversight; and
(iii)the exempt commercial purchaser has subsequently requested in writing to the producing insurance producer that the coverage be placed with the surplus lines insurer.