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Surplus Lines: Foreign

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 a Foreign 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 have a minimum total capital and/or surplus of at least $15,000,000.
     
  • The Applicant must have been examined within the last five years using the guidelines outlined in the NAIC Examiners Handbook.  The examination must cover a period of operation of not less than one full calendar year. A certified copy of the Report on Examination must be submitted with the application.
     
  • The Applicant must be authorized by its Charter and state of domicile to write the lines of business for which authority is requested.  Please see Section 38-1-20 (37.5) of the Code for the lines of business the Applicant can write.
     
  • Retaliatory provisions are authorized as per Section 38-7-90 of the Code.
     

If the Applicant meets the general requirements, please submit the required licensing documentation for a Foreign 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. Biographical Affidavit [pdf 122k]
     
    An affidavit should be submitted on each officer and director of the Applicant and its ultimate controlling entity. 
     
  3. A Holding Company Registration Statement, including an audited financial report, on the Applicant's ultimate controlling entity.
     
  4. The two most recent Annual Statements, including Management's Discussion & Analysis and the Statement of Actuarial Opinion, prepared on the NAIC convention form bearing original signatures and notarization.  Quarterly Statements must be submitted until the application is approved or disapproved.
    http://www.naic.org/
     
  5. A certified copy of the Applicant's most recent Report on Examination and a letter from a responsible officer of the applicant which addresses corrective actions taken to comments or recommendations contained within the Report.
     
  6. An audited financial statement, prepared by a Certified Public Accountant on a statutory accounting basis, as of the most recent December 31.
     
  7. Certified copies of the Applicant's Charter and By-laws.
     
  8. A Certificate of Compliance from the Applicant's home state showing the lines of business for which it is authorized
     
  9. South Carolina Insurance Department Affidavit of Compliance, Form 1008 [pdf 39k]
     
  10. Appointment of the Director of South Carolina Department of Insurance as Attorney to Accept Service of Process, Form 1027 SL [pdf 46k]
     
  11. A letter from the insurance department of the Applicant's state of domicile which shows the following requirements which would have to be met by a South Carolina eligible surplus lines insurer applying for a certificate of authority in the Applicant's state of domicile: capital and surplus; seasoning; application fee; licensing fees; and deposits as per Section 38-7-90 of the Code.
     
  12. The Applicant must submit a copy of its most recent NAIC IRIS ratios, explanatory comments for each unusual ratio, and steps taken or contemplated by management to bring each unusual ratio back to within the usual ranges for that ratio.
     
  13. Pro forma balance sheets and income statements and projected nationwide and South Carolina direct premium writings by line of business for the next three years. Please use the NAIC Pro Formas format.
     

SCDOI Contact Information

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