CHAPTER 26.1-44SURPLUS LINES INSURANCE26.1-44-01. Surplus lines insurance valid. Insurance contracts procured as surpluslines coverage from unauthorized insurers in accordance with this chapter are valid and<br>enforceable as to all parties and must be given recognition in all matters and respects to the<br>same effect as like contracts issued by authorized insurers.26.1-44-02.Affidavit as prerequisite of insurance - Contents.A surplus linesinsurance producer licensed under chapter 26.1-26 shall in every case execute and file with the<br>commissioner within sixty days of the effective date of any surplus lines insurance policy,<br>indemnity contract, or surety bond an affidavit in acceptable form that after a diligent search, an<br>inability exists to procure the insurance, indemnity contract, or surety bond desired from an<br>insurer authorized to do business in this state. There is a presumption that such inability exists<br>and that a diligent search has been made if the insurance, indemnity contract, or surety bond<br>provides coverage listed by the commissioner as an approved surplus lines coverage. If the<br>commissioner concurs in the allegation in the affidavit, the commissioner may authorize the<br>procuring of the insurance, indemnity contract, or bond from an insurer not authorized to do<br>business in this state.26.1-44-03. Surplus lines in solvent insurers. A surplus lines insurance producer maynot knowingly place surplus lines insurance with an insurer that is financially unsound. The<br>surplus lines insurance producer shall ascertain the financial condition of the unauthorized<br>insurer before placing insurance with the insurer. The surplus lines insurance producer may not<br>so insure with:1.Any insurer having less than five hundred thousand dollars of capital and five<br>hundred thousand dollars in surplus, if a stock company, and five hundred thousand<br>dollars in surplus, if a mutual company.2.Any alien insurer that has not established an effective trust fund of at least one<br>million dollars within the United States administered by a recognized financial<br>institution and held for the benefit of all its policyholders in the United States or<br>policyholders and creditors in the United States.26.1-44-04. Service of process. Any insurer desiring to transact any business underthis chapter, by any surplus lines insurance producer in this state, shall appoint in writing the<br>commissioner as its true and lawful attorney, upon whom legal process in any action or<br>proceeding against it must be served, and in the writing, shall agree that any legal process<br>against it, which is served upon the attorney, is of the same legal force and validity as if served<br>upon the insurer, and that the authority continues in force so long as any liability remains<br>outstanding in this state. Copies of the appointment certified by the commissioner are sufficient<br>evidence thereof and must be admitted in evidence with the same force and effect as the<br>original. Legal process may not be served upon the insurer except as provided by this section.<br>In any suit on a policy on behalf of the owner or holder of the policy, the service of process must<br>be made as provided by this section, but the action must be prosecuted in the county of the<br>policyholder's residence.26.1-44-05. Endorsement of policy. Every policy issued under this chapter must beendorsed "THIS POLICY IS ISSUED PURSUANT TO THE NORTH DAKOTA SURPLUS LINES<br>INSURANCE STATUTE UNDER THE SURPLUS LINES PRODUCER'S LICENSE OF _______.<br>THE INSURER IS A QUALIFIED SURPLUS LINES INSURER, BUT IS NOT OTHERWISE<br>LICENSED BY THE STATE OF NORTH DAKOTA AND DOES NOT PARTICIPATE IN THE<br>NORTH DAKOTA INSURANCE GUARANTY ASSOCIATION."The surplus lines insuranceproducer shall properly complete the endorsement by typing or printing the producer's full name<br>in the space provided and shall sign and date the endorsement.Page No. 126.1-44-06. Record of business - Filing of statement - Content. Every surplus linesinsurance producer shall keep a separate account of the business under the producer's license<br>and on or before the first day of April in each year shall file with the commissioner a statement for<br>the twelve months preceding, giving the name of the insured to whom a policy or indemnity<br>contract granting unauthorized insurance has been issued, the name and home office of each<br>insurer issuing the policy or contract, the amount of the insurance, the rates charged, the gross<br>premiums charged, the date and term of the policy, and the amount of premium returned on each<br>policy canceled or not taken, with such information and upon such form as required by the<br>commissioner, and pay the commissioner an amount equal to the taxes imposed by law on the<br>premiums of authorized insurance companies. If a surplus lines policy covers risks or exposures<br>only partially in this state, the tax so payable must be computed upon the portion of the premium<br>which is properly allocable to the risks or exposures located in this state.26.1-44-07.Actions against insurers issuing insurance - Venue - Service ofprocess - Time for answer. Every insurer making insurance under this chapter is deemed to be<br>doing business in this state as an unlicensed concern and may be sued upon any claim for relief<br>arising under any policy of insurance so issued and delivered by the insurer. The suit must be<br>brought in the district court of the county in which the plaintiff resides. Service of summons and<br>complaint in the suit must be made upon the commissioner in the manner provided by section<br>26.1-44-04.26.1-44-08.Civil penalty for failure to file statement and pay tax - Action forrecovery - Revocation of license - Conditions prerequisite to reissuance - Hearing<br>procedure and judicial review.Every such surplus lines insurance producer who fails orrefuses to make and file the annual statement, and to pay the taxes required to be paid prior to<br>the first day of May after such tax is due, is liable for a fine of twenty-five dollars for each day of<br>delinquence.The tax and fine may be recovered in an action to be instituted by thecommissioner in the name of the state, the attorney general representing the commissioner, in<br>any court of competent jurisdiction, and the fine, when so collected, must be paid to the state<br>treasurer and placed to the credit of the general fund. The commissioner, if satisfied that the<br>delay in filing the annual statement and the payment of the tax was excusable, may waive all or<br>any part of the fine. The commissioner may revoke or suspend the surplus lines insurance<br>producer's license of the producer if any surplus lines insurance producer fails to make and file<br>the annual statement and pay the taxes, or refuses to allow the commissioner to inspect and<br>examine the producer's records of the business transacted by the producer pursuant to this<br>chapter, or fails to keep the records in the manner required by the commissioner, or falsifies the<br>affidavit referred to in section 26.1-44-02.If the license of a surplus lines insurance producer is revoked, whether by the action ofthe commissioner or by judicial proceedings, another license may not be issued to that surplus<br>lines insurance producer until two years have elapsed from the effective date of the revocation,<br>nor until all taxes and fines are paid, nor until the commissioner is satisfied that full compliance<br>with this chapter will be had.26.1-44-09. Rulemaking authority. The commissioner may adopt reasonable rules toimplement this chapter.Page No. 2Document Outlinechapter 26.1-44 surplus lines insurance
CHAPTER 26.1-44SURPLUS LINES INSURANCE26.1-44-01. Surplus lines insurance valid. Insurance contracts procured as surpluslines coverage from unauthorized insurers in accordance with this chapter are valid and<br>enforceable as to all parties and must be given recognition in all matters and respects to the<br>same effect as like contracts issued by authorized insurers.26.1-44-02.Affidavit as prerequisite of insurance - Contents.A surplus linesinsurance producer licensed under chapter 26.1-26 shall in every case execute and file with the<br>commissioner within sixty days of the effective date of any surplus lines insurance policy,<br>indemnity contract, or surety bond an affidavit in acceptable form that after a diligent search, an<br>inability exists to procure the insurance, indemnity contract, or surety bond desired from an<br>insurer authorized to do business in this state. There is a presumption that such inability exists<br>and that a diligent search has been made if the insurance, indemnity contract, or surety bond<br>provides coverage listed by the commissioner as an approved surplus lines coverage. If the<br>commissioner concurs in the allegation in the affidavit, the commissioner may authorize the<br>procuring of the insurance, indemnity contract, or bond from an insurer not authorized to do<br>business in this state.26.1-44-03. Surplus lines in solvent insurers. A surplus lines insurance producer maynot knowingly place surplus lines insurance with an insurer that is financially unsound. The<br>surplus lines insurance producer shall ascertain the financial condition of the unauthorized<br>insurer before placing insurance with the insurer. The surplus lines insurance producer may not<br>so insure with:1.Any insurer having less than five hundred thousand dollars of capital and five<br>hundred thousand dollars in surplus, if a stock company, and five hundred thousand<br>dollars in surplus, if a mutual company.2.Any alien insurer that has not established an effective trust fund of at least one<br>million dollars within the United States administered by a recognized financial<br>institution and held for the benefit of all its policyholders in the United States or<br>policyholders and creditors in the United States.26.1-44-04. Service of process. Any insurer desiring to transact any business underthis chapter, by any surplus lines insurance producer in this state, shall appoint in writing the<br>commissioner as its true and lawful attorney, upon whom legal process in any action or<br>proceeding against it must be served, and in the writing, shall agree that any legal process<br>against it, which is served upon the attorney, is of the same legal force and validity as if served<br>upon the insurer, and that the authority continues in force so long as any liability remains<br>outstanding in this state. Copies of the appointment certified by the commissioner are sufficient<br>evidence thereof and must be admitted in evidence with the same force and effect as the<br>original. Legal process may not be served upon the insurer except as provided by this section.<br>In any suit on a policy on behalf of the owner or holder of the policy, the service of process must<br>be made as provided by this section, but the action must be prosecuted in the county of the<br>policyholder's residence.26.1-44-05. Endorsement of policy. Every policy issued under this chapter must beendorsed "THIS POLICY IS ISSUED PURSUANT TO THE NORTH DAKOTA SURPLUS LINES<br>INSURANCE STATUTE UNDER THE SURPLUS LINES PRODUCER'S LICENSE OF _______.<br>THE INSURER IS A QUALIFIED SURPLUS LINES INSURER, BUT IS NOT OTHERWISE<br>LICENSED BY THE STATE OF NORTH DAKOTA AND DOES NOT PARTICIPATE IN THE<br>NORTH DAKOTA INSURANCE GUARANTY ASSOCIATION."The surplus lines insuranceproducer shall properly complete the endorsement by typing or printing the producer's full name<br>in the space provided and shall sign and date the endorsement.Page No. 126.1-44-06. Record of business - Filing of statement - Content. Every surplus linesinsurance producer shall keep a separate account of the business under the producer's license<br>and on or before the first day of April in each year shall file with the commissioner a statement for<br>the twelve months preceding, giving the name of the insured to whom a policy or indemnity<br>contract granting unauthorized insurance has been issued, the name and home office of each<br>insurer issuing the policy or contract, the amount of the insurance, the rates charged, the gross<br>premiums charged, the date and term of the policy, and the amount of premium returned on each<br>policy canceled or not taken, with such information and upon such form as required by the<br>commissioner, and pay the commissioner an amount equal to the taxes imposed by law on the<br>premiums of authorized insurance companies. If a surplus lines policy covers risks or exposures<br>only partially in this state, the tax so payable must be computed upon the portion of the premium<br>which is properly allocable to the risks or exposures located in this state.26.1-44-07.Actions against insurers issuing insurance - Venue - Service ofprocess - Time for answer. Every insurer making insurance under this chapter is deemed to be<br>doing business in this state as an unlicensed concern and may be sued upon any claim for relief<br>arising under any policy of insurance so issued and delivered by the insurer. The suit must be<br>brought in the district court of the county in which the plaintiff resides. Service of summons and<br>complaint in the suit must be made upon the commissioner in the manner provided by section<br>26.1-44-04.26.1-44-08.Civil penalty for failure to file statement and pay tax - Action forrecovery - Revocation of license - Conditions prerequisite to reissuance - Hearing<br>procedure and judicial review.Every such surplus lines insurance producer who fails orrefuses to make and file the annual statement, and to pay the taxes required to be paid prior to<br>the first day of May after such tax is due, is liable for a fine of twenty-five dollars for each day of<br>delinquence.The tax and fine may be recovered in an action to be instituted by thecommissioner in the name of the state, the attorney general representing the commissioner, in<br>any court of competent jurisdiction, and the fine, when so collected, must be paid to the state<br>treasurer and placed to the credit of the general fund. The commissioner, if satisfied that the<br>delay in filing the annual statement and the payment of the tax was excusable, may waive all or<br>any part of the fine. The commissioner may revoke or suspend the surplus lines insurance<br>producer's license of the producer if any surplus lines insurance producer fails to make and file<br>the annual statement and pay the taxes, or refuses to allow the commissioner to inspect and<br>examine the producer's records of the business transacted by the producer pursuant to this<br>chapter, or fails to keep the records in the manner required by the commissioner, or falsifies the<br>affidavit referred to in section 26.1-44-02.If the license of a surplus lines insurance producer is revoked, whether by the action ofthe commissioner or by judicial proceedings, another license may not be issued to that surplus<br>lines insurance producer until two years have elapsed from the effective date of the revocation,<br>nor until all taxes and fines are paid, nor until the commissioner is satisfied that full compliance<br>with this chapter will be had.26.1-44-09. Rulemaking authority. The commissioner may adopt reasonable rules toimplement this chapter.Page No. 2Document Outlinechapter 26.1-44 surplus lines insurance
CHAPTER 26.1-44SURPLUS LINES INSURANCE26.1-44-01. Surplus lines insurance valid. Insurance contracts procured as surpluslines coverage from unauthorized insurers in accordance with this chapter are valid and<br>enforceable as to all parties and must be given recognition in all matters and respects to the<br>same effect as like contracts issued by authorized insurers.26.1-44-02.Affidavit as prerequisite of insurance - Contents.A surplus linesinsurance producer licensed under chapter 26.1-26 shall in every case execute and file with the<br>commissioner within sixty days of the effective date of any surplus lines insurance policy,<br>indemnity contract, or surety bond an affidavit in acceptable form that after a diligent search, an<br>inability exists to procure the insurance, indemnity contract, or surety bond desired from an<br>insurer authorized to do business in this state. There is a presumption that such inability exists<br>and that a diligent search has been made if the insurance, indemnity contract, or surety bond<br>provides coverage listed by the commissioner as an approved surplus lines coverage. If the<br>commissioner concurs in the allegation in the affidavit, the commissioner may authorize the<br>procuring of the insurance, indemnity contract, or bond from an insurer not authorized to do<br>business in this state.26.1-44-03. Surplus lines in solvent insurers. A surplus lines insurance producer maynot knowingly place surplus lines insurance with an insurer that is financially unsound. The<br>surplus lines insurance producer shall ascertain the financial condition of the unauthorized<br>insurer before placing insurance with the insurer. The surplus lines insurance producer may not<br>so insure with:1.Any insurer having less than five hundred thousand dollars of capital and five<br>hundred thousand dollars in surplus, if a stock company, and five hundred thousand<br>dollars in surplus, if a mutual company.2.Any alien insurer that has not established an effective trust fund of at least one<br>million dollars within the United States administered by a recognized financial<br>institution and held for the benefit of all its policyholders in the United States or<br>policyholders and creditors in the United States.26.1-44-04. Service of process. Any insurer desiring to transact any business underthis chapter, by any surplus lines insurance producer in this state, shall appoint in writing the<br>commissioner as its true and lawful attorney, upon whom legal process in any action or<br>proceeding against it must be served, and in the writing, shall agree that any legal process<br>against it, which is served upon the attorney, is of the same legal force and validity as if served<br>upon the insurer, and that the authority continues in force so long as any liability remains<br>outstanding in this state. Copies of the appointment certified by the commissioner are sufficient<br>evidence thereof and must be admitted in evidence with the same force and effect as the<br>original. Legal process may not be served upon the insurer except as provided by this section.<br>In any suit on a policy on behalf of the owner or holder of the policy, the service of process must<br>be made as provided by this section, but the action must be prosecuted in the county of the<br>policyholder's residence.26.1-44-05. Endorsement of policy. Every policy issued under this chapter must beendorsed "THIS POLICY IS ISSUED PURSUANT TO THE NORTH DAKOTA SURPLUS LINES<br>INSURANCE STATUTE UNDER THE SURPLUS LINES PRODUCER'S LICENSE OF _______.<br>THE INSURER IS A QUALIFIED SURPLUS LINES INSURER, BUT IS NOT OTHERWISE<br>LICENSED BY THE STATE OF NORTH DAKOTA AND DOES NOT PARTICIPATE IN THE<br>NORTH DAKOTA INSURANCE GUARANTY ASSOCIATION."The surplus lines insuranceproducer shall properly complete the endorsement by typing or printing the producer's full name<br>in the space provided and shall sign and date the endorsement.Page No. 126.1-44-06. Record of business - Filing of statement - Content. Every surplus linesinsurance producer shall keep a separate account of the business under the producer's license<br>and on or before the first day of April in each year shall file with the commissioner a statement for<br>the twelve months preceding, giving the name of the insured to whom a policy or indemnity<br>contract granting unauthorized insurance has been issued, the name and home office of each<br>insurer issuing the policy or contract, the amount of the insurance, the rates charged, the gross<br>premiums charged, the date and term of the policy, and the amount of premium returned on each<br>policy canceled or not taken, with such information and upon such form as required by the<br>commissioner, and pay the commissioner an amount equal to the taxes imposed by law on the<br>premiums of authorized insurance companies. If a surplus lines policy covers risks or exposures<br>only partially in this state, the tax so payable must be computed upon the portion of the premium<br>which is properly allocable to the risks or exposures located in this state.26.1-44-07.Actions against insurers issuing insurance - Venue - Service ofprocess - Time for answer. Every insurer making insurance under this chapter is deemed to be<br>doing business in this state as an unlicensed concern and may be sued upon any claim for relief<br>arising under any policy of insurance so issued and delivered by the insurer. The suit must be<br>brought in the district court of the county in which the plaintiff resides. Service of summons and<br>complaint in the suit must be made upon the commissioner in the manner provided by section<br>26.1-44-04.26.1-44-08.Civil penalty for failure to file statement and pay tax - Action forrecovery - Revocation of license - Conditions prerequisite to reissuance - Hearing<br>procedure and judicial review.Every such surplus lines insurance producer who fails orrefuses to make and file the annual statement, and to pay the taxes required to be paid prior to<br>the first day of May after such tax is due, is liable for a fine of twenty-five dollars for each day of<br>delinquence.The tax and fine may be recovered in an action to be instituted by thecommissioner in the name of the state, the attorney general representing the commissioner, in<br>any court of competent jurisdiction, and the fine, when so collected, must be paid to the state<br>treasurer and placed to the credit of the general fund. The commissioner, if satisfied that the<br>delay in filing the annual statement and the payment of the tax was excusable, may waive all or<br>any part of the fine. The commissioner may revoke or suspend the surplus lines insurance<br>producer's license of the producer if any surplus lines insurance producer fails to make and file<br>the annual statement and pay the taxes, or refuses to allow the commissioner to inspect and<br>examine the producer's records of the business transacted by the producer pursuant to this<br>chapter, or fails to keep the records in the manner required by the commissioner, or falsifies the<br>affidavit referred to in section 26.1-44-02.If the license of a surplus lines insurance producer is revoked, whether by the action ofthe commissioner or by judicial proceedings, another license may not be issued to that surplus<br>lines insurance producer until two years have elapsed from the effective date of the revocation,<br>nor until all taxes and fines are paid, nor until the commissioner is satisfied that full compliance<br>with this chapter will be had.26.1-44-09. Rulemaking authority. The commissioner may adopt reasonable rules toimplement this chapter.Page No. 2Document Outlinechapter 26.1-44 surplus lines insurance
