PLNew Yorkmedium
A New York licensed broker has tried, in good faith, to place a high-value coastal homeowners policy with three admitted insurers, all of whom declined. The broker now wants to place the risk with a non-admitted surplus lines carrier. What does NY Ins. Law § 2105 require?
AThe broker may place the coverage immediately because three declinations have been documented.
BThe broker must obtain prior DFS approval for each individual surplus-lines transaction.
CThe risk must be placed through NYPIUA instead of any non-admitted insurer.
The broker must additionally hold an Excess Line Broker license and document the declinations on the affidavit before placing with a non-admitted insurer.
Why this is the answer
Section 2105 of the New York Insurance Law creates a secondary 'excess line broker' license that sits on top of an existing § 2104 broker license. The licensee must (a) hold the § 2105 license, (b) be unable to place the risk in the admitted market after a diligent search (typically three declinations from admitted carriers for personal lines), (c) place only with insurers on the DFS-approved Excess Line List, and (d) file a declinations affidavit (Form EL-NB) with the Excess Line Association of New York (ELANY). Three declinations alone do not authorize a non-§ 2105 broker to bind surplus-lines coverage.
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