Solvent insurer required

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  • (a) A surplus line broker shall not place any coverage with an unauthorized insurer unless, at the same time of placement, such insurer:

    • (1) has established satisfactory evidence of good repute and financial integrity;

    • (2) has caused to be provided to the Commissioner, no more than six months after the close of the period reported upon, a certified copy of its current annual statement which is either:

      • (A) filed with and approved by the regulatory authority in the domicile of the unauthorized insurer; or

      • (B) certified by an accounting or auditing firm licensed in the jurisdiction of the insurer's domicile; and

    • (3) has been deemed eligible for the placement of risks by the Commissioner.

  • (b) In order to be deemed eligible by the Commissioner, the unauthorized insurer must have capital and surplus in an amount not less than $7,000,000 in the aggregate; Provided, that in order to qualify under this section, an alien insurer must maintain in the United States an irrevocable trust fund in either a national bank or a member of the Federal Reserve System, in an amount not less than $2,500,000 for the protection of all its policyholders in the United States. Such trust fund, which shall be included in any calculation of capital and surplus, shall:

    • (1) consist of cash, securities, letters of credit, or of investments substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this Territory; and

    • (2) have an expiration date which at no time shall be less than (5) years.

  • (c) If at any time the Commissioner has reason to believe that an unauthorized insurer:

    • (1) is in unsound financial condition;

    • (2) has wilfully violated the laws of this Territory, or

    • (3) does not make reasonably prompt payment of just losses and claims in the Virgin Islands or elsewhere, the Commissioner may declare such insurer ineligible. The Commissioner shall promptly mail notice of all such declarations to each surplus line broker.

  • (d) For representing or aiding an unauthorized insurer in violation of this chapter, a surplus line broker shall be fined not more than $1,000 per offense, his surplus line broker's license may be revoked, his other insurance licenses may be revoked, and the broker may not again be so licensed within a period of two years thereafter.


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