| Admitted Insurers |
Non-Admitted Insurers |
Risk Retention Groups & Risk Purchasing Groups |
|
| Description | An insurer authorized by the California DOI to issue policies to California residents. | Alien or foreign insurer not admitted in California, but listed in the DOI’s List of Eligible Surplus Lines Insurers. | RRG – all members must be insureds; all members must have similar liability risks/ businesses.
RPG – group of persons with similar risks and insurance needs; purchases insurance on a group basis. |
| Guarantee Fund (CIGA) Protection | Member of CIGA, so insureds may be afforded protection by CIGA if insurer becomes insolvent. | Not a member of CIGA, so no guarantee fund to protect insureds if insurer becomes insolvent. | RRGs are not members of CIGA, so insureds have no guarantee fund protection if RRG becomes insolvent.RPG members will have CIGA protection only if RPG placed coverage with an admitted insurer. |
| Department of Insurance (DOI) Scrutiny | Substantial DOI scrutiny, including mandatory reporting, claim audits, audits of underwriting and market conduct. | DOI does not regulate rates or audit underwriting or market conduct. | DOI does not regulate rates or audit underwriting or market conduct. |
| Rate and Form Approval | Must submit rate schedules and policy forms to DOI for approval. | No required DOI approval of rate schedules and policy forms. | No required DOI approval of rate schedules and policy forms. |
| Financial Examination | Proof of financial stability must be submitted to DOI; files quarterly and annual financial statements with DOI. | DOI does not conduct financial examination; surplus lines broker not a guarantor of financial stability of non-admitted insurer. | DOI may examine an RRG’s financial condition only if RRG’s state of domicile refuses to conduct examination. |
| Procurement of Policy | Directly or through agent or broker. | Must utilize surplus lines broker. | Membership in RRG or RPGrequired. |
| Governing Law | Subject to all insurance laws and regulations of the State of California. | Subject to laws of its domicile; not subject to all California insurance laws and regulations. | Governed by Risk Retention Act; not subject to all California insurance laws and regulations. |
