- Virginia maintains a list of eligible surplus lines insurers (see Other Comments section #1).
- Virginia does have a Surplus Lines Association (see Other Comments section #7).
- Virginia does not have an Export List.
- Virginia does have an industrial insured exemption (see Appendix C) that will remain in effect. As of 7/21/2011, the NRRA exempt commercial purchaser exemption is also effective, although it is not yet codified.
- Surplus lines tax: 2.25%, (except workers’ compensation) payable by broker.
- Virginia has not affiliated with any existing compact (HB 2286) Effective: July 1, 2011. Virginia requires every licensed surplus lines broker or person required to be licensed as a surplus lines broker to pay the Insurance Premiums License Tax on each policy of insurance that is procured during the preceding calendar year with an insurer not licensed to transact insurance business in Virginia. For policies effective on or after July 1, 2011, such payments are based on the direct gross premium income derived from policies for insureds whose home state is Virginia. See Va. Code §38.2-4809 for more information.
- Virginia passed legislation in 2018 that allows domestic surplus lines insurers in the state.
Eligibility and Filing Requirements (Alien Insurers Only):
An alien insurer is deemed approved by the Commission if such insurer is listed on the Quarterly Listing of Alien Insurers maintained by the NAIC. (§38.2-4811D)
Eligibility and Filing Requirements (Foreign Insurers Only):
- Annual Statement/Quarterly Statement: due no later than March 1 (unless the insurer’s state of domicile has established a later filing date) and/or one month and fifteen days after the end of the latest quarter showing a minimum of $15 million in capital and surplus. If filed with the NAIC, then a hard copy is not required.
- Certificate of Compliance.
- Virginia Plan of Operation (for initial application). Description of specific plan of operation in Virginia, including a list of surplus lines brokers.
Types of Insurance Exempted from Surplus Lines Regulation:
- Insurance on vessels or crafts, their cargoes, marine builders’ risks, marine protection and indemnity, or other risks commonly insured under marine insurance policies, as distinguished from inland marine insurance policies. However, other provisions of Title 38.2 of the Code of Virginia may apply.
- Insurance of the rolling stock and operating properties of railroads used in interstate commerce or of any liability or other risks incidental to the ownership, maintenance or operation of such railroads. However, other provisions of Title 38.2 of the Code of Virginia may apply.
- Industrial Insurance.
Other Comments or Requirements:
- Current list of foreign approved insurers available at Virginia Insurance Department’s website at http://www.scc.virginia.gov/boi/ (follow procedures for the list of surplus lines carriers; click on “Consumer Home”; select “Company Lookup,” select “Company,” select “Surplus Lines Carrier.” A complete list of foreign surplus lines carriers approved in Virginia is listed.
- Exempted classes of insurance subject to premium taxes must be placed by a Virginia licensed surplus lines broker.
- Broker must have a surplus lines broker license in home state and complete an application.
- Virginia allows a surplus lines carrier to sell ultralight aircraft insurance as defined by the Federal Aviation Administration. Ultralight aircraft owners are required by state financial responsibility laws to either carry a $100,000 insurance policy or deposit $50,000 with the State Treasury.
- A notice in a form prescribed by the Commission must be given to the insured by the surplus lines broker procuring the policy or by any duly licensed property and casualty insurance agent placing surplus lines business with the surplus lines broker. The notice must contain, but not be limited to, statements that the policy is being procured from or has been placed with an insurer approved by the Commission for issuance of surplus lines insurance in this Commonwealth, but not licensed or regulated by the Commission and that there is no protection under the Virginia Property and Casualty Insurance Guaranty Association against financial loss to claimants or policyholders because of the insolvency of an unlicensed insurer. The notice must also set forth the name, license number and mailing address of the broker. The notice must be given prior to placement of the insurance. In the event coverage must be placed and become effective within twenty-four hours after referral of the business to the surplus lines broker, the notice may be given promptly following such a placement. In addition, a copy of the notice must be affixed to the policy.
- As per Administrative Letter 2008-06, surplus lines insurers, risk retention groups not chartered in Virginia, and licensed insurers transacting the business of insurance with risk purchasing groups not domiciled in Virginia are only required to use Virginia automobile standard forms if the insurer, on behalf of its insured, files an SR-22 or FR-44 with the Virginia Department of Motor Vehicles in order to comply with Virginia’s financial responsibility laws. Consequently the Bureau of Insurance has withdrawn Administrative Letter 1995-4, which required surplus lines insurers to use the automobile standard forms without exception.However, the following entities must always use Virginia automobile standard forms, and any additional provisions or coverages more favorable than those in the automobile standard forms used by these entities must be approved by the Bureau as set forth in § 38.2-2223 of the Code of Virginia:
• A risk retention group chartered in Virginia; or
• A licensed insurer that transacts the Business of insurance with a risk purchasing group domiciled in Virginia.
- The Virginia Surplus Lines Association is a private organization and not sanctioned by the State Corporation Commission. Contact information is as follows: Greg P. Provenzo, c/o Atlantic Specialty Lines, Inc., [email protected].
- Effective July 1, 2008, the Virginia legislature eliminated the due diligence requirement that surplus lines brokers attempt to procure insurance from a licensed insurer before he provides a surplus lines policy. An affidavit affirming that notice has been given to the insured that the insurance is not placed with a Virginia licensed insurer must still be filed within the Virginia State Corporation Commission within 30 days after the end of each quarter.
- Virginia enacted Legislation in 2015 increasing the maximum assessment of fire insurance companies, including surplus lines policies, for the Fire Programs Fund from .001 to .025%.