- Vermont does not maintain a list of eligible surplus lines insurers.
- Vermont does not have a Surplus Lines Association.
- Vermont does not have an Export List.
- Vermont does have an industrial insured exemption (see Appendix C) which will remain in effect. Vermont’s new statute is silent on the definition of exempt commercial purchasers but the NRRA exempt commercial purchaser exemption is recognized in Vermont unless or until SLIMPACT adopts rules.
- Surplus lines tax: 3%, paid quarterly by broker.
- Vermont has adopted SLIMPACT (SB 36).
- Vermont does not allow domestic surplus lines insurers in the state.
Eligibility and Filing Requirements (All Insurers):
NRRA restricts the eligibility requirements a state may impose on nonadmitted insurers. See 15 U.S.C. § 8204. For nonadmitted insurers domiciled in a U.S. jurisdiction, broker is permitted to place nonadmitted insurance with such insurers provided they are authorized to write such business in their state of domicile and maintain minimum capital and surplus of $15 million.
For nonadmitted insurers domiciled outside the U.S., a broker may place business with such insurers provided the insurer is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the NAIC.
Types of Insurance Exempted from Surplus Lines Regulation:
- Insurance on property or operations of aircraft or railroads engaged in transportation in interstate and foreign commerce.
- Insurance on vessels, crafts, or hulls, cargoes, marine builder’s risks, marine protection and indemnity or other risks including strikes and war risks commonly insured under ocean or wet marine forms of policy.
- Transactions involving wet marine and transportation insurance covering property in the course of transportation by land, air, or water, to, from or through Vermont and including any preparation or storage incidental thereto.
- Industrial Insurance.
Other Comments or Requirements:
- Vermont Insurance Department Bulletin 134 (November 8, 2001) clarifies the Department’s policy on whether surplus lines liability carriers must provide coverage for punitive as well as compensatory damages. The Department allows surplus lines carriers to exclude punitive damages from surplus lines policies because that encourages the development of the surplus lines insurance market and the coverage of risks that would not otherwise be covered.
- Each surplus lines broker through whom a surplus lines insurance coverage is procured shall endorse on the outside of the policy and on any confirmation of the insurance, his or her name, address and license number, and the name and address of the producer, if any, through whom the business originated. Where such coverage is placed with an eligible surplus lines insurer there shall be stamped or written conspicuously in no smaller than 10 point boldface type of a contrasting color upon the first page of the policy and the confirmation of insurance if any, “The company issuing this policy has not been licensed by the state of Vermont and the rates charged have not been approved by the commissioner of insurance. Any default on the part of the insurer is not covered by the Vermont Insurance Guaranty Association.”