When corporate policyholders sue their insurers, the roster of defendants often includes an “unauthorized” insurer, whether it be Lloyd's of London (which is licensed in only two states, though it writes as an eligible surplus lines insurer in some or all of the other states), a London Market Company, or a domestic insurer not licensed to sell insurance in the state where suit was brought.
Pre-Answer Security: Regulatory Protection for Policyholders in an Age of Insecurity
When corporate policyholders sue their insurers, the roster of defendants often includes an "unauthorized" insurer, whether it be Lloyd's of London (which is licensed in only two states, though it writes as an eligible surplus lines insurer in some or all of the other states), a London Market Company, or a domestic insurer not licensed to sell insurance in the state where suit was brought. Such insurers have avoided many of the stringent state regulations that govern "authorized" insurers. But in the majority of states, those insurers are subject to a <i>quid pro quo</i> in exchange for enjoying relaxed regulation: Unauthorized insurers (whether foreign or domestic, "eligible" as surplus lines carriers or not) are subject to a pre-Answer security requirement. That is, before they may answer a Complaint against them, unauthorized insurers must post cash, securities, or a bond sufficient to satisfy any judgment that may be entered against them.
By
Seth A. TuckerThis premium content is locked for LawJournalNewsletters subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN LawJournalNewsletters
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already have an account? Sign In Now
For enterprise-wide or corporate access, please contact Customer Service at [email protected] or call 1-877-256-2473.
