Your agent ("producer") has placed the insurance you requested in the "surplus lines market" with one or more surplus lines insurers. The surplus lines market is an insurance
marketplace that is established to insure unique or hard-to-place risks. Surplus lines insurers are not licensed in Oregon, but this does not mean that the transaction is completely unregulated. Oregon
law places requirements on the producer, who must hold a special license.
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What is a surplus lines policy?
A surplus lines policy is a policy placed with an insurer that is not
licensed in Oregon, but is eligible to provide property or liability
insurance through a specially licensed producer known as a surplus lines
licensee.
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Why am I getting coverage from a surplus lines insurer?
Your producer may have been unable to obtain the coverage you requested
from licensed insurers in Oregon, but was able to get coverage from
an eligible surplus lines insurer. The risk or property for which you
sought coverage may be unique or have certain risk characteristics that
caused licensed insurers to decline to write the policy. If licensed
insurers will not write the risk, state regulations allow coverage to
be obtained from a surplus lines insurer.
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Since the surplus lines insurer is unlicensed, is the transaction
unregulated?
Surplus lines transactions are regulated by state laws that require
such policies to be procured only by specially licensed producers. Surplus
lines licensees are authorized to transact business with certain unlicensed
insurers that meet financial and other eligibility standards set by
the state. These insurers are known as surplus lines insurers. Your
producer may have worked with a surplus lines licensee in procuring
your policy, or your producer may hold a surplus lines license.
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Is my surplus lines policy covered by the state guaranty or insolvency
fund?
No. There is no guaranty fund coverage for surplus lines policies.
The guaranty fund, which provides payments if your insurance company
becomes insolvent, only covers policies of licensed insurers.
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How is the rate or price of a surplus lines policy determined?
The rate or premium charged for a surplus lines policy is determined
by the surplus lines insurer. As unlicensed insurers, surplus lines
insurers do not file their rates or premiums with the state for review
or approval.
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Does the Oregon Insurance Division review or approve the terms and
conditions of this policy.
Surplus lines policies are not reviewed or approved by the state.
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Can my policy be renewed or extended?
Your surplus lines policy may or may not be renewed or extended when
the policy expires. An extension of the policy coverage depends on the
continued unavailability of coverage from insurers licensed in this
state and the willingness of the surplus lines insurer to continue to
accept the risk. Since a surplus lines policy is generally not subject
to the same notice requirements as a policy issued by a licensed insurer,
notice of a premium increase for a new policy term or the insurer's
intent not to extend the policy at the same terms and conditions might
not be provided until close to the date the policy expires. Therefore,
you should keep in contact with your producer, particularly as the expiration
of the policy term nears, to ascertain the status of the policy and
to assure continuity of coverage.
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How do I find a surplus lines licensee?
A list of active licensees is available on the Web site of the Surplus
Line Association of Oregon (link to http://www.slaor.org/index.cfm?fuseaction=Insurance.main)
Click on the Active Licensees tab at the top of the page.
