AML Committee Report

Admitted Market Liaison Committee Report: 03/23/2021

Table of Contents

Committee Focus

  • Duty set forth pursuant to CIC Section 1780.56(a)(8): To communicate with organizations of admitted insurers with respect to the proper use of the surplus line market[1]
  • Committee established pursuant to the SLA Constitution (Articles IV, VII, XIII)[2]
  • Consists of up to six individual resident members and/or the authorized representative of organization resident members
  • Liaises with the admitted market on matters of common interest
  • Assigned powers specified in Article XIII, which describes mediation procedures.

Executive Summary

  • The AML Committee conducted its annual meeting with organizations of admitted insurers: American Property Casualty Insurance Association (APCIA) and the Personal Insurance Federation of California (PIFC). The meetings were held virtually via video conference on January 27, 2021. Discussions addressed included:
    • Wildfires: legislation related to homeowner’s/residential property insurance coverage for wildfire risks and the implications on the admitted, non-admitted insurance markets.
    • Export list (hearing): determination of a “reasonable or adequate” market of admitted insurers.
    • Market Trends and Emerging Issues
  • The AML Committee and the Legislative Committee jointly hosted John Norwood of Norwood Associates, LLC, for a legislative update and discussion on March 4, 2021. Mr. Norwood provided a recap of the current state of legislative activity and expectations for the current session.
  • On March 4, 2021, the AML Committee met with the Honorable Harry Low, who was re-elected as the SLA Mediator on February 9. The committee reviewed the role and history of the SLA Mediator, and discussed the opportunity to engage the mediator in future communications with the admitted markets.

[1] http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS&sectionNum=1780.56.

[2] https://www.slacal.com/general-information/constitution

Action Items and Status

1. Expand outreach and communication with the admitted market.

Action Item:

Meet with trade associations such as APCIA and PIFC and send newsletters and other communications to these and other organizations.

Status:

January 2021: Trip scheduled for January 27, 2021, held via video conference. Insurance coverage for wildfire risks and related claims in the admitted and nonadmitted markets continue to be a focus of discussion.

Comments:

The admitted market trade associations and the SLA will continue to meet regularly to discuss key trends and developments impacting the insurance markets.

2. Ensure proper use of the surplus line market.

Action Item:

Annual or regular review of the export list to monitor for any changes. Meet with trade associations such as APCIA and PIFC to determine a rational methodology for determining the existence or absence of a “reasonable” or “adequate” insurance market among admitted insurers for a given risk or coverage. Engage the SLA Mediator when applicable to facilitate a resolution amongst the industry parties for presentation to the CDI.

Status:

TBD 2021:  On-going

3. Serve as a source of professional expertise regarding trends and developments, regulatory and legislative activity relevant to the surplus line market.

Action Item:

Reach out to other insurance associations to identify opportunities to collaborate in partnership with the SLA Education Committee

  • CPCU Society interest groups via webinars, articles & sessions. https://www.cpcusociety. org/interest-groups/how-join. The Reinsurance and Excess/Surplus/Specialty Lines group.
  • CPCU CA Chapters

Other organizations, including:

  • WSIA
  • IIABCal
  • CIAB
  • RMIS
  • III (Triple-I)
  • Chamber of Commerce
  • California State University – Fullerton, School of Risk Management & Insurance

SLA committees: Education & Compliance, Next Generation, Special Advisory, Legislative

Status:

April 2021: Wildfire Risk Panel. Glenn Leung (SLA Financial Analysis VP), member of the CPCU Reinsurance and Excess/Surplus/Specialty Lines interest group, and President of the CPCU – Golden Gate (San Francisco) chapter; Susan Atkins (Committee Chair), President, and Jeff Thomas, Treasurer, of the CPCU – Sacramento Valley chapter. As part of a collaboration effort, broadcast SLA education opportunities to CPCU and other relevant organizations.

Comments:

CPCU Interest groups include:

  • 3IG;
  • Agent & Broker;
  • Coverage, Litigators, Educators & Witnesses;
  • Professional Growth & Development;
  • Regulatory & Legislative
  • Reinsurance and Surplus/Specialty Lines;
  • Risk Management & Loss Control;
  • Underwriting
  • Leadership & Managerial Excellence
  • Loss Control
  • Personal Lines
  • Regulatory & Legislative
  • Risk Management

Underwriting

CPCU CA Chapters include:

  • California El Camino
    https://caelcamino.cpcusociety.org/
  • California Golden Empire
    https://cagoldenempire.cpcusociety.org/
  • Golden Gate
    https://goldengate.cpcusociety.org/
  • Los Angeles https://losangeles.cpcusociety.org/
  • Mt. Diablo California
    https://mtdiablo.cpcusociety.org/
  • Orange Empire
    https://orangeempire.cpcusociety.org/
  • Sacramento Valley
    https://sacramentovalley.cpcusociety.org
  • San Diego
    https://sandiego.cpcusociety.org/

4. Strengthen the message about the role and purpose of surplus lines.

Action Item:

Develop high quality educational video that effectively and efficiently represents the critical role of surplus lines to respond to the insurance needs of consumers and support the economy. Find opportunities to strengthen the understanding of the admitted and non-admitted market relationship via meaningful presentation of market data. Tailor presentation and message specific to regulators, admitted companies, agents, associations, and various others. Spotlight coverage & risks insured by surplus lines carriers creating visuals of the importance of the surplus line market and how it remains responsive, stable, and viable.

Status:

TBD 2021