1998 Minnesota Statutes

     60A.198 Transaction of surplus lines insurance. 

    Subdivision 1.    License required.  A person shall not 
 act in any other manner as an agent or broker in the transaction 
 of surplus lines insurance unless licensed under sections 
 60A.195 to 60A.209.  

    Subd. 2.    Compliance with statutory provisions.  A 
 person shall not offer, solicit, make a quotation on, sell, or 
 issue a policy of insurance, binder, or any other evidence of 
 insurance with an eligible or ineligible surplus lines insurer, 
 except in compliance with sections 60A.195 to 60A.209.  

    Subd. 3.    Procedure for obtaining license.  A person 
 licensed as an agent in this state pursuant to other law may 
 obtain a surplus lines license by doing the following:  

    (a) filing an application in the form and with the 
 information the commissioner may reasonably require to determine 
 the ability of the applicant to act in accordance with sections 
 60A.195 to 60A.209; 

    (b) maintaining an agent's license in this state; 

    (c) delivering to the commissioner a financial guarantee 
 bond from a surety acceptable to the commissioner for the 
 greater of the following:  

    (1) $5,000; or 

    (2) the largest semiannual surplus lines premium tax 
 liability incurred by the applicant in the immediately preceding 
 five years; 

    (d) agreeing to file with the commissioner of revenue no 
 later than February 15 and August 15 annually, a sworn statement 
 of the charges for insurance procured or placed and the amounts 
 returned on the insurance canceled under the license for the 
 preceding six-month period ending December 31 and June 30 
 respectively, and at the time of the filing of this statement, 
 paying the commissioner a tax on premiums equal to three percent 
 of the total written premiums less cancellations; 

    (e) paying a fee as prescribed by section 60K.06, 
 subdivision 2, paragraph (a), clause (4); and 

    (f) paying penalties imposed under section 289A.60, 
 subdivision 1, as it relates to withholding and sales or use 
 taxes, if the tax due under clause (d) is not timely paid. 

    Subd. 4.    Licensee's powers.  A surplus lines licensee 
 may do any or all of the following:  

    (a) Place insurance on risks in this state with eligible 
 surplus lines insurers; 

    (b) Place insurance on risks in this state with ineligible 
 surplus lines insurers in strict compliance with section 
 60A.209.  If the insurance is provided through the participation 
 of several surplus lines insurers and the licensee has reason to 
 believe that a substantial portion of the insurance would be 
 assumed by eligible surplus lines insurers, then with respect to 
 the ineligible surplus lines insurers, the insured or the 
 insured's representative shall be informed as provided in 
 section 60A.209, subdivision 1, clause (a); or 

    (c) Engage in any other acts expressly or implicitly 
 authorized by sections 60A.195 to 60A.209 and the other 
 insurance laws.  

    Subd. 5.    Disclosures.  Before placement of insurance 
 with an eligible surplus lines insurer, a surplus lines licensee 
 shall inform an insured or the insured's representative that 
 coverage may be placed in conformance with sections 60A.195 to 
 60A.209 with an insurer not licensed in this state and that 
 payment of loss is not guaranteed in the event of insolvency of 
 the eligible surplus lines insurer.  

    Subd. 6.    Allocation of premiums according to location 
 of subject matter.  If the insurance described in subdivision 
 4 also covers a subject of insurance residing, located, or to be 
 performed outside this state, for the purposes of this section, 
 a proper pro rata portion of the entire premium payable for all 
 of that insurance must be allocated according to the subjects of 
 insurance residing, located, or to be performed in this state. 

    HIST: 1981 c 221 s 4; 1983 c 328 s 7; 1984 c 592 s 40; 1986 c 
 444; 1987 c 337 s 12; 1989 c 260 s 6; 1990 c 480 art 6 s 2; 1993 
 c 375 art 10 s 4; 1994 c 632 art 4 s 25