§431:8-302  Surplus lines in solventinsurers.  (a)  No surplus lines broker shall, either knowingly or withoutreasonable investigation of the financial condition and general reputation ofthe insurer, place insurance with financially unsound insurers or with insurersengaging in unfair practices.

(b)  Before placing insurance with anyunauthorized insurer, the broker shall ascertain the financial condition of theinsurer and:

(1)  In the case of a foreign insurer, shall maintainin the broker's office a current certificate, in proper form, from theregulatory authority in the domicile of the unauthorized insurer, to the effectthat the insurer has capital and surplus, or its equivalent under the laws ofits domiciliary jurisdiction, which equals the minimum capital and surplusrequirements of this State for that kind of insurer as set out in article 3; or

(2)  In the case of an alien insurer, shall maintainin the broker's office evidence of the financial responsibility of theinsurer.  Evidence satisfactory to the commissioner that the insurer maintainsin the United States an irrevocable trust fund in either a national bank or amember of the Federal Reserve System in an amount not less than $5,400,000 forthe protection of all its policyholders in the United States consisting ofcash, securities, letters of credit, or of investments of substantially thesame character and quality as those which are eligible investments for thecapital and statutory reserves of authorized insurers writing like kinds of insurancein this State, shall constitute prima facie evidence of responsibility.

Upon request by the commissioner, the broker shallimmediately submit to the commissioner the items described in this subsection.

(c)  The requirements of this section may be satisfiedby an insurer possessing less than the capital and surplus set forth insubsection (b) upon an affirmative finding of acceptability by thecommissioner.  The finding shall be based upon such factors as quality ofmanagement, capital and surplus of parent company, company underwriting profitand investment income trends, and company record and reputation within theindustry.  In no event shall the commissioner make an affirmative finding ofacceptability when the surplus lines insurer's capital and surplus is less than$500,000. [L 1987, c 347, pt of §2; am L 1993, c 205, §12; am L 2000, c 182,§7]