Posted on 29 Sep 2010
On Monday surplus lines insurance reforms have been signed into law by California Governor Arnold Schwarzenegger. The governor signed AB1708, which amends Section 1765.1 of the California Insurance Code.
The law the total capital and surplus requirements for nonadmitted insurers in California to be at least $45 million, up from $15 million. It also requires $25 million of this amount to be held in forms that meet the requirements of Department of Insurance statutes relative to the general investment law. AB 1708 also authorizes the balance of the required minimum capital to be held in instruments that are allowable under either the General Investments Law or the Excess Funds Investments Law.
If a nonadmitted insurer on the List of Eligible Surplus Line insurers does not meet the capital and surplus requirements as of Jan. 1, 2011, the insurer must have at least $30 million in capital and surplus as of Dec. 31, 2011, and at least $45 million by Dec. 31, 2013.