Export List Hearings

California Insurance Code ("CIC") Section 1763 requires surplus line brokers to ensure that a diligent search among admitted insurers has been made before soliciting and placing insurance for a home state insured with a nonadmitted insurer. 

Pursuant to CIC Section 1763.1, the Commissioner may, by order, exempt certain types of coverage from the requirements of CIC Section 1763 (other than the filing of a confidential written report) if the Commissioner finds there is not a reasonable or adequate market among admitted insurers for that type of coverage or that the type of coverage is a new, innovative product for which a reasonable or adequate market among admitted insurers has not had time to develop.  The list of risks and coverages that fall within these categories is called the Export List.

The Commissioner holds a public hearing at least once a year to evaluate evidence regarding requests to change the Export List.  All interested parties are given reasonable notice as follows.

Hearing Procedures

1. Pre-Hearing Notice: The Pre-Hearing Notice notifies and requests any parties that will request an addition, deletion, or modification of an Export List item to submit that item to the California Department of Insurance (“CDI”) so that the item may be included in a subsequent Notice of Export List Hearing.
2. Notice of Export List Hearing: The Notice of Export List is a second notice that includes the following:
   1. Any requested addition, deletion, or modification to the Export List, which will be under consideration during the hearing.
   2. How to attend and/or participate during the hearing. 
   3. Instructions on how to submit evidence.  The Notice states that the Commissioner must have evidence that there is not an adequate or reasonable market for the risk or coverage, as suggested, in the admitted market (such as copies of SL-2 forms) or that the type of coverage is for new, innovative products for which a reasonable or adequate market among admitted insurers has not had time to develop.
   4. Any evidence to be considered must be submitted before the record closes at 5:00 p.m. (Pacific Time) on the day of the hearing.    

IMPORTANT

Section 1763.1 of the CIC requires the Commissioner to “find,” after a public hearing, that a statutory ground exists before ordering the addition of a type of insurance coverage or risk to the Export List.  These grounds are:

• There is not a reasonable or adequate market among admitted insurers.
• The type of coverage is for new, innovative products for which a reasonable or adequate market among admitted insurers has not had time to develop.

Therefore, to approve the addition of a requested or proposed type of insurance coverage or risk, evidence to support a finding of at least one of those statutory grounds is needed in regards to that specific type of insurance coverage or risk requested.  Pertinent authority, including but not limited to Sections 1763 and 1763.1 of the CIC and regulations, such as Section 2133 and following sections of Title 10 of the California Code of Regulations, might provide guidance.  Submission of a statement requesting a risk or coverage to be added to the Export List without supporting evidence is not sufficient for the Commissioner to make a finding to add a type of insurance coverage or risk to the Export List.

The Department does not provide legal advice and interested parties proposing changes to the Export List are encouraged to seek legal counsel for guidance.  

3. Bulletin: After the hearing, the Commissioner reviews the evidence and comments submitted. CDI publishes a Bulletin regarding any changes the Commissioner decides to make to the Export List; a copy of the current Export List is attached to the Bulletin.

For procedural questions regarding the Export List and Export List Hearings, please contact the Department’s Export List Team at ExportListHearing@insurance.ca.gov.

Link to Previous Bulletins, Notices, and Pre-Hearing Notices