Validity of contracts illegally effectuated

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  • (a) No contract of insurance placed by a surplus line broker shall be binding upon the insured and no premium charged therefor shall be due and payable until the surplus line broker shall have notified the insured in writing, a copy of which shall be maintained by the broker with records of the contract and available for examination, that:

    • (1) the insurer with which the broker has placed the insurance is not licensed in this Territory and is not subject to its supervision; and

    • (2) in the event of the insolvency of the unauthorized insurer, losses will not be paid by the Virgin Islands Guaranty Fund.

  • (b) A contract of insurance effectuated by an unauthorized insurer in violation of the provisions of this title shall be voidable except at the instance of the insurer.


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