The California Department of Insurance (CDI) held an Export List hearing on Wednesday, August 22, pursuant to the new law enacted in 2017 enabling the department to hold multiple hearings if needed and to consider new, innovative products for which an adequate and reasonable admitted insurance market has not yet developed.
SLA Executive Director Benjamin McKay testified, reiterating that the new law, proposed and lobbied successfully by the SLA last year, gives the department greater expressed authority to add coverages to the list, and that this will help facilitate coverage for the wide array of new technologies and products in which California is among the world's leaders. He also reported that all coverages on the Export List have been utilized for the past five years and updated the CDI on the top five Export List coverages by premium and item for the past full 12 months. These were as follows:
Top five Export List coverages by premium (August 1, 2017-July 31, 2018):
- Commercial DIC/Stand-Alone Earthquake: $643,472,317
- Excess Liability Where Part of Underlying Is Nonadmitted: $308,896,448
- Individual Insureds with Large Schedules: $225,300,069
- Environmental Impairment Remediation/Pollution Liability: $202,630,459
- Employment Practices Liability: $176,248,800
Top five Export List coverages by item count (August 1, 2017-July 31, 2018):
- Commercial DIC/Stand-Alone Earthquake: 26,793
- Employment Practices Liability: 16,469
- Excess Liability Where Part of Underlying is Nonadmitted: 10,528
- Environmental Impairment Remediation/Pollution Liability:10,277
- International Major Medical: 7,585
The only new addition to either list is the emergence of international major medical among the top five Export List coverages in item count, supplanting vacant buildings.
Also at the hearing, the top coverage on the list (commercial DIC/stand-alone earthquake) came up for debate, with some insurers asking that it be removed from the list because they believe an adequate and reasonable admitted market has developed. Representatives of ICW Group and Golden Bear Insurance Company testified that this coverage should be taken off of the list, while a representative of Worldwide Facilities said that only three admitted markets, lacking the higher ratings that some banks need to approve mortgages, are currently writing it, and one of those products is a mix of admitted and nonadmitted.
In response to statements implying that the admitted market is more solvent than the surplus lines market, attorney Dan Brown of Drinker Biddle told the CDI that no surplus line insurer had become insolvent in about 15 years.
Additionally, representatives of Ascend Insurance Solutions asked the CDI to add third-party liability and physical damage coverage for unmanned aerial vehicles (i.e., drones) while in flight and not-in-flight. The CDI will now consider both requests and announce its decisions at an unspecified date. The SLA will inform its membership of the CDI's decisions.
To see the current Export List, please go to: http://www.slacal.com/brokers/export-list
. And to see more about the dynamic California surplus lines marketplace, visit us at http://www.slacal.com/