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‘Domesticating’ Surplus Lines across the states

States are making progress in adopting domestic surplus lines insurers laws, but some are more welcoming than others.

By David Kodama | Updated on September 15, 2017
States are gradually amending their insurance laws to allow more domestic surplus lines insurers. (Photo: Shutterstock)

Nearly a decade ago, states slowly began making progress in addressing the question of why an insurer that wanted to write surplus lines business in all 50 states had to create two companies.

Before the inception of domestic surplus lines insurer (DSLI) laws, an insurer that wanted to write in all states would have a primary company licensed in a state as an admitted insurer that could then be eligible to issue surplus lines policies in the other 49 states. Then, additional capital would be raised and a secondary admitted insurance company would be created and domiciled in a different state so that it could write surplus lines insurance in the state where the primary company was located.

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