We hold that the Department has a fair point, albeit a relatively small one: there is the need for oversight of policy rates and forms, for sure, but we feel that as long as a New Jersey workers' compensation policy remains in full compliance and is fully insured by the financial strength of an
admitted insurer, business owners should be free to retain any amount of risk they desire through subsequent reinsurance.
* Broker: "A person who, for compensation and on behalf of another person, transacts [insurance]...with, but not on behalf of, an
admitted insurer."
The problem, however, is that a number of foreign countries have implemented laws requiring that the D&O policy be purchased from a locally
admitted insurer or an insurer that is owned by local interests.
Before then, only insurance buyers that no
admitted insurer considered attractive would approach surplus lines insurers, Bolig said.
There are many quality non-admitted companies, but an
admitted insurer is superior, if available.
In Brazil, for example, if the company's D & O coverage is not provided by a locally
admitted insurer, payment of loss is prohibited into the country from an insurer outside the country.
State law requires that when risk is insured in Washington, it be done through an
admitted insurer or through an unauthorized insurer placed through a licensed surplus line broker.
Assuming that the New York insurance agent or broker meticulously complies with all aspects of New York law in the placement of the coverage and properly explains the nature of the coverage to the underlying insured, there may be no greater errors and omissions exposure writing with a non-admitted insurer than with an
admitted insurer. (Note, from an errors and omissions defense attorney's point of view, I still cling to the ridiculous, and urge all New York insurance agents and brokers to write with only New York admitted companies--an obvious impossibility.)