- Nebraska does not maintain a list of eligible surplus lines insurers.
- Nebraska does not have a Surplus Lines Association.
- Nebraska does not have an Export List.
- Nebraska does not have an industrial insured exemption (statutory exemption repealed upon enactment of NRRA) but the NRRA’s Commercial Purchaser Exemption is in effect. § 44-5502).
- Surplus lines tax: 3%, payable by broker (see Other Comments section #4).
- Nebraska does allow domestic surplus lines insurers in the state.
Eligibility and Filing Requirements (Alien Insurers Only):
A surplus broker may not place coverage with any alien insurer unless it appears on the NAIC’s Quarterly List of Alien Insurers. § 44 5508(2).
Eligibility and Filing Requirements (Foreign Insurers Only):
A surplus lines broker may not place coverage with a nonadmitted foreign insurer unless, at the time of placement, the nonadmitted insurer:
- Is authorized to write such insurance in its domiciliary jurisdiction;
- Has established satisfactory evidence of good repute and financial integrity; and
- Possesses capital and surplus — or its equivalent under the laws of its domiciliary jurisdiction — that equals the greater of the minimum capital and surplus requirements under the laws of Nebraska or $15 million.
The director may waive the minimum capital and surplus requirement for a nonadmitted insurer if the director makes an affirmative finding of acceptability after considering: quality of management, capital and surplus of a parent company, company underwriting profit and investment trends, market availability, and company record and reputation within the industry. §44-5508(1)(c)(ii). The director may not make a finding of acceptability if the insurer’s capital and surplus is under $4.5 million. § 44-5508(1)(c)(ii).
Types of Insurance Exempted from Surplus Lines Regulation:
- Transactions in the state, relative to policies issued or to be issued outside the state, involving insurance on vessels, crafts or hulls, cargoes, marine builders’ risks, marine protection and indemnity or other risks, including strikes and war risks commonly insured under ocean or wet marine forms of policy.
- Life insurance, variable life, variable annuities and sickness and accident insurance. (Note: disability insurance that has a benefit limit in excess of any benefit limit available from an admitted insurer may be placed through the surplus lines market).
Other Comments or Requirements:
- Burden is on broker to ascertain existence of trust fund.
- A surplus lines licensee must stamp or type upon the declaration page of each policy procured and delivered the following information:
(a) The licensee’s name, business address, and surplus lines license number; (b) the name under which the licensee transacts business if different than the licensee’s own name; and (c) the language:“This policy is issued by a nonadmitted insurer, and in the event of the insolvency of such insurer, this policy will not be covered by the Nebraska Property and Liability Insurance Guaranty Association.”
- Nebraska permits the procurement of sickness and accident insurance from a nonadmitted insurer under the Surplus Lines Insurance Act. This does not prohibit the procurement of disability insurance that has a benefit limit in excess of any benefit limit available from an admitted insurer.
- Effective January 1, 2017, all surplus lines premium where Nebraska is the home state of the insured are taxed 100% at Nebraska’s rate of 3%.
- Nebraska enacted legislation in 2019 to allow for domestic surplus lines insurers in the state. Under the Nebraska law, a domestic surplus lines insurer (a) must possess policyholder surplus of at least fifteen million dollars; (b) is an eligible surplus lines insurer in at least one state jurisdiction other than Nebraska; and (c) is acting pursuant to a resolution passed by the insurer’s board of directors seeking to be a domestic surplus lines insurer in Nebraska. All financial and solvency requirements apply to a domestic surplus lines insurer (unless specifically exempted). Further, policies issued by a domestic surplus lines insurer are not subject to the protections or other requirements of the Nebraska Property and Liability Insurance Guaranty Association Act or the Nebraska Life and Health Insurance Guaranty Association Act.