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Surplus Lines: Alien

Overview

Title 38, Chapter 45 of the South Carolina Code of Laws ("Code") [pdf 29k], defines the regulations for Surplus Lines Insurers and should be read thoroughly.  Outlined below are the general requirements to be met by an Alien Eligible Surplus Lines Insurer (the “Applicant”) to qualify to transact business in South Carolina.

  • The application must be submitted by a licensed resident broker as per Section 38-45-90 of the Code.  The sponsoring broker, under his/her business letterhead, must state that the Applicant will offer coverages not available through duly licensed companies, and must specifically describe the coverages which will be undertaken. Once the Applicant is added to this Department’s list of Alien Eligible Surplus Lines Insurers, any licensed resident broker can file an individual submission request for approval of a risk located in this State.
     
  • The Applicant must be listed with the National Association of Insurance Commissioners (NAIC) International Insurers Department (IID). Once approved to be added to the Department's list of Alien Eligible Surplus Lines Insurers, it must remain on the IID List. Should the Department receive notification from the IID that the insurer has been removed from its list, the insurer will be immediately suspended from conducting further business in this State, and its name will be removed from this Department's list of Alien Eligible Surplus Lines Insurers.
     
  • The Applicant will be approved to write only property, casualty, surety, and marine classes of business as defined in Sections 38-1-20(9), (28), (34), and (37) of the Code. Excess and stop-loss insurance coverage upon group life, accident, and health or upon a self-insured's life, accident, and health benefit program may also be approved as surplus lines insurance.  Please see Section 38-1-20 (37.5) of the Code.
     
  • The Applicant will not be permitted to write any class of business in this State for which it is not authorized by its charter.
     

If the Applicant meets the general requirements, the sponsoring broker can submit the required licensing documentation for an Alien Eligible Surplus Lines Insurer.  Partial or incomplete applications will be returned!

 

Licensing

  1. Application for Certificate of Authority - Surplus Lines, Form 1000 [pdf 46k]
     
  2. A report of the Applicant's United States premium activity for the two (2) most recent calendar years by line of business.
     
  3. Copies of Applicant's audited financial statements, or annual reports containing substantially the same financial information, for the two (2) most recent calendar years. The information must be in English and U.S. dollars.
     
  4. The amount of premium by line of business to be written in this State during the current and next year.
     
  5. A copy of the U.S. Trust Agreement and a summary of the deposits held in the Trust Account.
     
  6. A copy of the Applicant's Charter and Articles of Incorporation approved by its domiciliary country.
     
  7. Name and address of the Applicant’s U.S. Counsel/Attorney-in-Fact.
     
  8. A copy of the most recently available Standard IID Financial Reporting Format (in its entirety) which is filed annually with the IID. This format provides additional information not currently shown in the IID Financial Review of Alien Insurers.
     
  9. Appointment of the Director of South Carolina Department of Insurance as Attorney to Accept Service of Process, Form 1027 SL [pdf 46k]
     
  10. Any other information which the Applicant feels would assist this Department in its review of the application.
     

Renewals

In order for an alien eligible surplus lines insurer to remain on the Department’s list of approved alien eligible surplus lines insurers, it:

  1. Must remain on the National Association of Insurance Commissioners International Insurers Department Listing of Alien Insurers.
     
  2. Must submit, by August 15, a report for the preceding calendar year of South Carolina premium volume by major class of business.

Penalties will be imposed for failure to file all requested information timely as per Sections 38-2-10 and 38-5-130 of the Code.  The required information should be sent to the attention of Tim Campbell, Chief Financial Analyst. 

 

Instructions for an Eligible Surplus Lines Insurer

Only a licensed South Carolina resident broker may place an excess or surplus lines risk with an insurer which is not licensed in our state but is approved as an Alien or Foreign Eligible Surplus Lines Insurer.  In view of this requirement and to ensure each broker of the solvency and stability of an insurer whose facilities he or she wishes to utilize, the qualification of the approved Alien or Foreign Eligible Surplus Lines Insurer is the responsibility of the broker.  Each resident broker has been apprised of this information.  Also, the broker must demonstrate a need for the Alien or Foreign Eligible Surplus Lines Insurer’s product and that the product is not available from duly licensed companies.

You should contact a licensed South Carolina resident broker to sponsor the application as an Alien or Foreign Eligible Surplus Lines Insurer.  Once the insurer is added to the South Carolina Department's list of approved Alien or Foreign Eligible Surplus Lines Insurers, then any resident South Carolina broker may make placements with the insurer on an individual basis.
 

SCDOI Contact Information

Tim Campbell, Chief Financial Analyst
Phone: 803-737-6221 
Email: TCampbell@doi.sc.gov