(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:

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Terms Used In South Carolina Code 38-45-90

  • Admitted insurer: means an insurer licensed to engage in the business of insurance in this State. See South Carolina Code 38-45-10
  • Department: means the Department of Insurance of South Carolina. See South Carolina Code 38-1-20
  • Director: means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the department. See South Carolina Code 38-1-20
  • Eligible surplus lines insurer: means a nonadmitted insurer with which a licensed broker, or a licensed producer as provided in § 38-45-10(8)(b)(ii), may place surplus lines insurance. See South Carolina Code 38-1-20
  • Exempt commercial purchaser: means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:

    (a) the person employs or retains a qualified risk manager to negotiate insurance coverage;

    (b) the person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars in the immediately preceding twelve months; and

    (c)(i) the person meets at least one of the following criteria:

    (A) the person possesses a net worth in excess of twenty million dollars, as that amount is adjusted pursuant to subsubitem (ii);

    (B) the person generates annual revenues in excess of fifty million dollars, as that amount is adjusted pursuant to subsubitem (ii);

    (C) the person employs more than five hundred full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than one thousand employees in the aggregate;

    (D) the person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least thirty million dollars as that amount is adjusted pursuant to subsubitem (ii); or

    (E) the person is a municipality with a population in excess of fifty thousand persons. See South Carolina Code 38-45-10
  • insurance: includes annuities. See South Carolina Code 38-1-20
  • Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Nonadmitted insurer: means an insurer not licensed to do an insurance business in this State. See South Carolina Code 38-1-20
  • Oversight: Committee review of the activities of a Federal agency or program.
  • State: includes 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 South Carolina Code 38-45-10
  • Surplus lines insurance: means any property and casualty insurance permitted to be placed directly or through a surplus lines broker, or an insurance producer as provided in subitem (b)(ii), with a surplus lines insurer eligible to accept the insurance as defined in § 38-1-20(56). See South Carolina Code 38-45-10
  • Surplus lines insurer: means an insurer not licensed to engage in the business of insurance in this State, but does not include a risk retention group, as that term is defined in Section 2(a)(4) of the Liability Risk Retention Act of 1986 (15 U. See South Carolina Code 38-45-10

(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.

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