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The Vermont Statutes Online
Title
08
:
Banking and Insurance
Chapter
138A
:
SURPLUS LINES INSURANCE MULTI-STATE COMPLIANCE COMPACT
§
5053. Definitions
As used in this
chapter:
(1)
"Admitted insurer" means an insurer that is licensed, or authorized,
to transact the business of insurance under the laws of the home state. It
shall not include a domestic surplus lines insurer as may be defined by
applicable State law.
(2)
"Affiliate" means with respect to an insured, any entity that
controls, is controlled by, or is under common control with the insured.
(3)
"Allocation formula" means the uniform methods adopted by the
Commission by which insured risk exposures will be apportioned to each state
for the purpose of calculating premium taxes due.
(4)
"Bylaws" means the bylaws established by the Commission for its
governance, or for directing or controlling the Commission's actions or conduct.
(5)
"Clearinghouse" means the Commission's operations involving the
acceptance, processing, and dissemination, among the compacting states,
contracting states, surplus lines licensees, insureds, and other persons, of
premium tax and clearinghouse transaction data for non-admitted insurance of
multi-state risks, in accordance with this Compact and rules adopted by the
Commission.
(6)
"Clearinghouse transaction data" means the information regarding
non-admitted insurance of multi-state risks required to be reported, accepted,
collected, processed, and disseminated by surplus lines licensees for surplus
lines insurance and insureds for independently procured insurance under this
Compact and rules adopted by the Commission. Clearinghouse transaction data includes
information related to single-state risks if a state elects to have the
clearinghouse collect taxes on single-state risks for such state.
(7)
"Commission" means the Surplus Lines Insurance Multi-State Compliance
Compact Commission established by this compact.
(8)
"Commissioner" means the chief insurance regulatory official of a
state, including commissioner, superintendent, director, or administrator, or
their designees.
(9)
"Compact" means the Surplus Lines Insurance Multi-State Compliance
Compact established under this chapter.
(10)
"Compacting state" means any state which has enacted this Compact
legislation and which has not withdrawn pursuant to subsection 5065(a), or been
terminated pursuant to subsection 5065(b), of this chapter.
(11)
"Contracting state" means any state which has not enacted this
Compact legislation but has entered into a written contract with the Commission
to use the services of and fully participate in the clearinghouse.
(12)
"Control." An entity has "control" over another entity if:
(A) the entity
directly or indirectly or acting through one or more other persons own,
controls, or has the power to vote 25 percent or more of any class of voting
securities of the other entity; or
(B) the entity
controls in any manner the election of a majority of the directors or trustees
of the other entity.
(13)(A)
"Home state" means, with respect to an insured:
(i) the state in
which an insured maintains its principal place of business or, in the case of
an individual, the individual's principal residence; or
(ii) if 100
percent of the insured risk is located out of the state referred to in
subdivision (A)(i) of this subsection, the state to which the greatest
percentage of the insured's taxable premium for that insurance contract is
allocated.
(B) If more than
one insured from an affiliated group are named insureds on a single
non-admitted insurance contract, the term "home state" means the home
state, as determined pursuant to subdivision (A) of this subsection, of the
member of the affiliated group that has the largest percentage of premium
attributed to it under such insurance contract.
(14)
"Independently procured insurance" means insurance procured by an
insured directly from a surplus lines insurer or other non-admitted insurer as
permitted by the laws of the home state.
(15)
"Insurer eligibility requirements" means the criteria, forms, and
procedures established to qualify as a surplus lines insurer under the law of
the home state provided that such criteria, forms, and procedures are consistent
with the express provisions of NRRA on and after July 21, 2011.
(16)
"Member" means the person or persons chosen by a compacting state as
its representative or representatives to the Commission provided that each
compacting state shall be limited to one vote.
(17)
"Multi-state risk" means a risk with insured exposures in more than
one state.
(18)
"Non-admitted insurance" means surplus lines insurance and
independently procured insurance.
(19)
"Non-admitted insurer" means an insurer that is not authorized or
admitted to transact the business of insurance under the law of the home state.
(20)
"Noncompacting state" means any state which has not adopted this
compact.
(21)
"NRRA" means the Non-Admitted and Reinsurance Reform Act of 2010
which is Title V, Subtitle B of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Pub.L. 111-203.
(22)
"Policyholder notice" means the disclosure notice or stamp that is
required to be furnished to the applicant or policyholder in connection with a
surplus lines insurance placement.
(23)
"Premium tax" means with respect to non-admitted insurance, any tax,
fee, assessment, or other charge imposed by a government entity directly or
indirectly based on any payment made as consideration for such insurance, including
premium deposits, assessments, registration fees, and any other compensation
given in consideration for a contract of insurance.
(24)
"Principal place of business" means with respect to determining the
home state of the insured, the state where the insured maintains its
headquarters and where the insured's high-level officers direct, control, and
coordinate the business activities of the insured.
(25)
"Purchasing group" means any group formed pursuant to the Liability
Risk Retention Act of 1986, Pub.L. 99-563, which has as one of its purposes the
purchase of liability insurance on a group basis, purchases such insurance only
for its group members and only to cover their similar or related liability
exposure and is composed of members whose businesses or activities are similar
or related with respect to the liability to which members are exposed by virtue
of any related, similar, or common business, trade, product, services,
premises, or operations and is domiciled in any state.
(26)
"Rule" means a statement of general or particular applicability and
future effect adopted by the Commission designed to implement, interpret, or
prescribe law or policy or describing the organization, procedure, or practice
requirements of the Commission which shall have the force and effect of law in
the compacting states.
(27)
"Single-state risk" means a risk with insured exposures in only one
state.
(28)
"State" means any state, district, or territory of the United States
of America.
(29) "State
transaction documentation" means the information required under the laws
of the home state to be filed by surplus lines licensees in order to report
surplus lines insurance and verify compliance with surplus lines laws, and by
insureds in order to report independently procured insurance.
(30)
"Surplus lines insurance" means insurance procured by a surplus lines
licensee from a surplus lines insurer or other non-admitted insurer as
permitted under the law of the home state. It shall also mean excess lines
insurance as may be defined by applicable state law.
(31)
"Surplus lines insurer" means a non-admitted insurer eligible under
the law of the home state to accept business from a surplus lines licensee. It
shall also mean an insurer which is permitted to write surplus lines insurance
under the laws of the state where such insurer is domiciled.
(32)
"Surplus lines licensee" means an individual, firm, or corporation
licensed under the law of the home state to place surplus lines insurance.
(Added 2011, No. 49, § 1, eff. May 26, 2011.)
