Louisiana Adopts Domestic Surplus Lines Legislation – More States On The Way
February 16, 2016

Effective August 1, 2015, Louisiana became the 9th state in the United States to adopt legislation permitting the establishment of a domestic surplus lines insurer (“DSLI”). Louisiana now joins Illinois, Oklahoma, Arkansas, Delaware, New Hampshire, New Jersey, North Dakota and Missouri as the states that permit a DSLI to write coverage on a surplus lines basis in its state of domicile.

A company that wishes to write coverage on a surplus lines basis in all 50 states faces significant administrative burdens if the insurer is domiciled in a state that has not enacted DSLI legislation. In such states, a US-based surplus lines insurer has to operate on a licensed/admitted basis in its state of domicile. Thus, in order to write surplus lines insurance in the insurer’s home state, it is necessary to establish a separately capitalized carrier in a different state for the sole purpose of writing surplus lines coverage in the home state of the original insurer. These inefficiencies have become increasingly apparent to the states, with Arizona currently considering a bill to become the tenth state to adopt domestic surplus lines legislation allowing for a DSLI to conduct surplus lines operations in all states including its state of domicile.

Writing coverage on a surplus lines basis in an insurer’s home state may provide significant advantages. While declination and due diligence requirements must be met, the insurer enjoys freedom from rate and form and may be exempt from many provisions of its home state’s insurance laws. For more information on the surplus lines laws and regulations in all U.S. jurisdictions, including notable exemptions, please visit the Locke Lord Excess and Surplus Lines Manual.


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