The list of “Ineligible Surplus Line Insurers in Illinois” is available on the Surplus Line Association of Illinois website, which is linked in the resources below.

In Illinois, surplus line insurers are “unauthorized insurers” that do not hold a valid certificate of authority to sell insurance in Illinois. For this reason, surplus line insurance must be obtained from an Illinois-licensed “surplus line producer,” who may procure policies from surplus line insurers if certain conditions are met.

However, if the Illinois Department of Insurance (IDOI) makes a determination that an unauthorized insurer’s further assumption of risk might be hazardous to its policyholders, IDOI may declare the insurer “ineligible” and order surplus line producers to cease procuring insurance from the insurer. Accordingly, we believe such “ineligible” surplus line insurers would be considered “disapproved” under the new private flood insurance rules.

For resources related to our guidance, please see:

• Surplus Line Association of Illinois website, List of Ineligible Surplus Line Insurers in Illinois.
   
• Illinois Insurance Code, 215 ILCS 5/445(1) (“‘Unauthorized insurer’ means an insurer that does not hold a valid certificate of authority issued by the Director but, for the purposes of this Section, shall also include a domestic surplus line insurer as defined in Section 445a.”)

• Illinois Insurance Code, 215 ILCS 5/445(1.5)(b) (“Licensed surplus line producers may procure surplus line insurance from an unauthorized insurer domiciled in the United States only if the insurer:

(i) is permitted in its domiciliary jurisdiction to write the type of insurance involved; and

(ii) has, based upon information available to the surplus line producer, a policyholders surplus of not less than $15,000,000 determined in accordance with the laws of its domiciliary jurisdiction; and

(iii) has standards of solvency and management that are adequate for the protection of policyholders. Where an unauthorized insurer does not meet the standards set forth in (ii) and (iii) above, a surplus line producer may, if necessary, procure insurance from that insurer only if prior written warning of such fact or condition is given to the insured by the insurance producer or surplus line producer.”)

• Illinois Insurance Code, 215 ILCS 5/445(9) (“Director may declare insurer ineligible. If the Director determines that the further assumption of risks might be hazardous to the policyholders of an unauthorized insurer, the Director may order the Surplus Line Association of Illinois not to countersign insurance contracts evidencing insurance in such insurer and order surplus line producers to cease procuring insurance from such insurer.”)

• FDIC Flood Insurance Rules, 12 CFR 339.2 (“Private flood insurance means an insurance policy that: (1) Is issued by an insurance company that is:

(i) Licensed, admitted, or otherwise approved to engage in the business of insurance by the insurance regulator of the State or jurisdiction in which the property to be insured is located; or

(ii) Recognized, or not disapproved, as a surplus lines insurer by the insurance regulator of the State or jurisdiction in which the property to be insured is located in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential commercial property; . . .”)