Attached is Bulletin #94-13A, dated March 22, 1995, which revises some of the provisions of Bulletin #94-13 dated December 5, 1994, which described the transition from Regulation 2174 to Senate Bill 959. Members must familiarize themselves with the contents of Bulletin #94-13A and its immediate impact on current filing requirements.
In summary, Bulletin #94-13A states that the California Department of Insurance will consider all SB 959 filings made in 1995 as dual 2174 filings with an expiration date of December 31, 1995.
Remember, surplus line brokers must still file a valid Form A before any placements for carriers eligible in California under Regulation 2174 in 1995.
Should you have any questions or concerns, please contact the SLA office at (415) 434-4900. Thank you.
Edgar S. Clark
Executive Director
ESC/ljI
Attachment
STATE OF CALIFORNIA
DEPARTMENT OF INSURANCE
45 FREMONT STREET
SAN FRANCISCO, CA 94105
March 22, 1995
Bulletin No. 94-13A TO: All Surplus Line Brokers, Insurance Producers & other
Interested Persons
SUBJECT: New Surplus Line Insurance Law
The Department hereby corrects its Bulletin #94-13. In that bulletin on page 7 in the section entitled Transition for Insurers Presently under Requlation 2174.1 the Department expressed its concern about the transition between the 2174 listing and the SB 959 listing. The Department specifically stated that:
"The Department encourages 2174. 1 listed insurers to file for approval under SB 959 as soon as possible to give the Department adequate time to evaluate, and act upon, the SB 959 filing before the insurer's 2174.1 listing expires. The Department suggests that 2174.1 insurers consider renewing their 2174.1 filing in December, 1994 and thereby extend their surplus line authority thru December, 1995.
Additionally , if so requested by the submitting surplus line broker, the Department will accept the 2174.1 renewal submission as a filing for approval under SB 959. Thus, with one submission and one $1,500 filing fee, an insurer can renew its 2174.1 listing thru December, 1995 and also file for approval under SB 959. All 2174.1 renewals received in December, 1994 that are in substantial compliance with Regulation 2174.1 will be placed on the 2174.1 listing of filings with an expiration date of December 31, 1995."
Despite this warning, as of this date, the Department is surprised by the fact that brokers did not make any filings for some surplus line companies. other brokers made only 959 filings. Furthermore many filings were made late. As a result, several 2174 listed companies are in danger of expiring under 2174 before they are approved under SB 959.
The Department is quite concerned about the stability of the market and wants to make certain that there is a smooth transition from 2174 to SB 959. The Department wants to minimize market dislocation during this time period. The Department may have inadvertently and mistakenly not allowed enough time for brokers to make the necessary filings. some brokers appear to have made a 959 filing with the understanding that the carrier would still be an eligible 2174 carrier until the 959 filing was either approved or disapproved.
In light of the above, the Department hereby amends its order of December 2, 1994 as follows:
Surplus Line Enforcement Unit 45 Fremont
San Francisco, CA 94105
(415) 904-5700
CHUCK QUACKENBUSH
Insurance Commissioner
by
Timothy J. Summers
Deputy