The Massachusetts Division of Insurance ("MDOI") recently amended its surplus lines laws to allow for the approval of alien unauthorized insurers in the state. Previously, Massachusetts required that alien surplus lines insurers maintain a trusteed surplus in the US of $20 million and file financial information on an annual basis following US accounting principles which effectively made obtaining surplus lines eligibility in the state prohibitive for alien insurers.
The new application procedures for alien unauthorized insurers were made available yesterday, September 27, 2010 on the MDOI website. There is a $1275 application fee along with a minimum capital and surplus requirement of $20 million. In terms of processing time, the approval process is expected to be 1 to 2 months since most of the financial review has already been done by the International Insurers Department of the NAIC. However, companies wishing to be added to the Massachusetts eligibility list by 1 January 2011, should file the required documentation no later than October 15, 2010 to avoid precessing delays created by the MDOI's review of annual statements for US admitted/licensed companies which usually occurs in November and December.
The recently adopted federal Dodd-Frank Act will also purportedly allow access in all states to alien insurers appearing on the NAIC Quarterly List, effective 21 July 2011. However, it is unclear at this stage if there will be a transition period to allow NAIC listed insurers to write business in Massachusetts following the effective date of Dodd-Frank, or if there may be ancillary filings in Massachusetts or other states in connection with the approval process following the July 21, 2011 effective date of the federal legislation.