Introduction to the Export List
In the complex world of the non-admitted market, the Export List serves as a critical regulatory tool that streamlines the placement of specific high-risk or unusual insurance coverages. By definition, an export list is a roster of insurance coverages or classes of risk that a state’s insurance commissioner has determined have no reasonable or adequate market among admitted (licensed) insurers within that state.
For professionals studying for their licensing exams, understanding this concept is vital because it represents a major exception to the standard operating procedures of a Surplus Lines Broker. This topic is a core component of the complete E&S Lines exam guide and is frequently tested to ensure brokers understand their compliance obligations. Essentially, the export list identifies the 'hard-to-place' risks that are pre-approved for 'export' to the surplus lines market without jumping through the usual regulatory hoops.
The Diligent Search Requirement and the 'Free Pass'
To understand the value of an export list, one must first understand the diligent search requirement. Under normal circumstances, a retail agent or surplus lines broker cannot place a risk with a non-admitted insurer unless they have first attempted to place it with admitted carriers. Most states require a broker to receive at least three declinations from admitted companies that actually write that type of insurance before they can look toward the surplus lines market.
However, when a risk is placed on the state's Export List, the diligent search requirement is effectively waived. The state regulator has already acknowledged that the admitted market is unwilling or unable to provide coverage for these specific risks. Therefore, the broker is not required to seek declinations from the admitted market for any risk appearing on the list. This significantly speeds up the placement process and reduces the administrative burden on both the broker and the policyholder.
Standard Placement vs. Export List Placement
| Feature | Standard Surplus Lines Placement | Export List Placement |
|---|---|---|
| Diligent Search Required? | Yes (usually 3 declinations) | No (automatically waived) |
| Market Availability | Limited or selective | Non-existent in admitted market |
| Affidavit Filing | Required to prove search | Simplified or not required |
| Surplus Lines Tax | Applicable | Applicable |
| Regulatory Oversight | High (transactional review) | Moderate (list-based review) |
How Risks are Added to the Export List
The creation and maintenance of an export list are typically handled by the state’s Department of Insurance (DOI) or a designated Surplus Lines Stamping Office. The process is dynamic and relies on market feedback. Usually, the Commissioner holds annual or semi-annual public hearings to gather testimony from brokers, insurers, and the public regarding the availability of coverage in the admitted market.
Criteria for inclusion on the list generally include:
- Lack of Admitted Capacity: Admitted insurers simply do not have the financial appetite or reinsurance backing to take on the risk.
- Uniqueness of Risk: The risk is so specialized (e.g., amusement park liability or satellite insurance) that no standard forms exist.
- Hazardous Nature: The risk involves high levels of physical or financial peril that fall outside the underwriting guidelines of standard carriers.
For those preparing for certification, reviewing practice E&S Lines questions can help clarify how these regulatory mechanics differ across various jurisdictions.
Common Classes Found on Export Lists
Exam Tip: Export List vs. Admitted Market
The Impact on Surplus Lines Brokers
For the surplus lines broker, the export list is a 'safe harbor.' When a risk is on the list, the broker's compliance burden is greatly reduced. However, it is essential to remember that even if the diligent search is waived, other surplus lines regulations still apply. These include:
- Surplus Lines Taxes: The broker must still collect and remit the appropriate premium taxes to the home state.
- Notice Requirements: The policy must still contain the required 'Surplus Lines Warning' stamp or notice, informing the insured that the policy is not protected by the state's Guaranty Fund.
- Eligibility Verification: The broker must ensure that the non-admitted insurer is on the state's list of eligible surplus lines insurers (or meets the requirements of the Nonadmitted and Reinsurance Reform Act - NRRA).