M.G.L. c. 175 § 168A now allows alien insurers, or those insurers formed and operating outside of the United States, to write insurance on an excess and surplus basis. On September 27, 2010, the Massachusetts Division of Insurance published the following Alien Unauthorized Insurer Application for alien insurers wanting to enter the Massachusetts insurance marketplace. It states that “a company formed under the laws of any government or state other than the United States or one of its states or territories may be determined to be an ‘eligible alien unauthorized insurer’ in the Commonwealth of Massachusetts if it has filed an application with the Commissioner of Insurance, which is approved.”
In its press release, The Division of Insurance application requires the following ten items for an “alien unauthorized insurer applicant”:
- Evidence that the Applicant has been listed by the International Insurers Department of the National Association of Insurance Commissioners;
- A certified audited financial statement of the Applicant reflecting information in US Dollars as of a date not more than 12 months prior to the submission of the application evidencing compliance with the capital and surplus requirements of M.G.L. c. 175 § 168A(c)(2), as well as the most recent unaudited quarterly financial statements of the Applicant reflecting information in US Dollars;
- An acturial opinion as to the adequacy of and methodology used to determine the Applicant’s loss reserves;
- A copy, certified by the trustee, of the United States trust agreement required by clause M.G.L. c. 175, § 168A(c)(3), prepared in accordance with the National Association of Insurance Commissioner’s Standard Form Trust Agreement for Alien Excess or Surplus Lines Insurers;
- A copy, certified by the trustee, of the most recent quarterly statement of account or list of assets in the trust account required by M.G. L. c. 175, § 168A(c)(3), evidencing that the Applicant has in force, as of the end of the most recent quarter, assets in the amounts required by state statute;
- A certified copy of the Applicant’s current license or certificate of authority issued by its domiciliary jurisdiction indicating that the Applicant is authorized to insure the types of risk in its domiciliary jurisdiction that it proposes to insure in the Commonwealth;
- A certificate of good standing or substantially similar documentation issued by the Applicant’s domiciliary jurisdiction;
- Biographical affidavits, on forms promulgated by the National Association of Insurance Commissioners or approved by the Commissioner of Insurance, for all executive officers, directors and senior management personnel of the Applicant, prepared not more than 12 months prior to the submission date of the application required by M.G.L. c. 175, § 168A (c)(4);
- A copy of the Applicant’s most recent Annual and Quarterly Financial Statements filed with the NAIC International Insurers Department; and
- A check made payable to the Commonwealth of Massachusetts in the amount of $1275.00 for the application fee. This application fee is non-refundable.
For more information regarding the application procedure or to send in the completed requirements, the Division of Insurance asks that you send them to Peter J. Arens, Financial Surveillance and Company Licensing, Massachusetts Division of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200.
If you would like to learn more about this issue or need help in the application process or would otherwise like to discuss any other potential legal issues please contact Owen Gallagher here or on his direct line at 617.598.3801.