Idaho has seen an impressive surge of surplus lines business over the last year, reporting a 15.7% increase from mid-year 2018 to mid-year 2019, and is now proposing new laws to further drive the growth of its surplus lines market. Pursuant to the Governor’s Executive Order 19-02, (the “Red Tape Reduction Act”), Idaho is rolling out revised regulations for public hearing on October 16, 2019, that provide updated procedures for the placement of surplus lines insurance in the state of Idaho. Of particular note are the changes to the diligent search requirement. In most jurisdictions, including Idaho, in order to place insurance coverage on a surplus lines basis, the surplus lines insurance broker must conduct a “diligent search” of the admitted insurance market to determine if comparable coverage is available through an authorized insurer. Typically this would include submitting a risk to at least three (3) admitted insurers. Idaho’s proposed regulations would significantly cut this requirement down, requiring the risk to be submitted for declination to only one (1) admitted insurer before exporting a risk to the surplus lines market. While this may seem like a small change, if enacted, this means a much faster route to market for surplus lines coverage and evidence of further recognition by the Idaho Department of Insurance that surplus lines insurance is encouraged in the state. Moreover, the proposed change reflects the growing trend across the nation whereby a number of states are either eliminating or alleviating diligent search requirements in light of evolving means of insurance distribution as well as technological advancements driving expeditious delivery of specialty insurance products to insureds.
 US Surplus Lines Premium Up 12.7%, SURPLUS LINES STAMPING OFFICE OF TEXAS (Aug. 1, 2019) (https://www.sltx.org/news/enews/us-surplus-lines-premium-up-12-7/).
The post LL Surplus Lines Series (Entry 17): Idaho Proposes Updating Surplus Lines Laws to Alleviate Diligent Search Requirement appeared first on Insurance & Reinsurance.