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Title 3 . Commerce, Community, and Economic Development
Chapter 25 . Miscellaneous
Section 30. Due diligence; documentation

3 AAC 25.030. Due diligence; documentation

(a) A producing broker who wishes to procure insurance from a nonadmitted insurer through a surplus lines broker first shall use due diligence in determining whether the insurance is available from an admitted insurer. Due diligence requires that the producing broker contact admitted insurers that customarily write the kind of insurance required by the insured. Due diligence will be presumed if

(1) unavailability is documented by declinations from admitted insurers, or

(2) affirmation that the coverage is on the director's current list under 3 AAC 25.040 of kinds of insurance that may be placed with eligible nonadmitted insurers.

(b) As a minimum effort in satisfying the requirements of (a)(1) of this section, the producing broker shall obtain declinations from admitted insurers with which the producing broker has an agency appointment or broker contract, according to the following schedule:



Appointments and broker contracts Declinations 0 1 1 1 2 2 3 2 4 or more 3

Except as provided in (d) of this section, declinations must be secured within 90 days before the effective date of the insurance.

(c) Documentation of declinations shall be in writing from the contacted admitted insurers, if possible. Oral declinations shall be documented in writing by the producing broker and shall include the name, office location, and phone number of the insurer, the name and position of the person contacted, the date of contact, and a detailed explanation of the declination.

(d) A dated written declination from an insurer for a kind of insurance for a class of business may be cited for other insureds for a period not to exceed 180 days after issuance of the declination. All individual insurers of a group of insurers associated through common ownership or control together constitute only one declination.

(e) An affidavit including the information in (c) of this section shall be signed by the producing broker, delivered by the producing broker to the surplus lines broker that procured the coverage, and filed with the director by the surplus lines broker with the report of surplus lines transaction required by AS 21.34.080 (a).

(f) A copy of the affidavit shall be maintained in the insured's files of both the producing broker and the surplus lines broker.

History: Eff. 8/28/91, Register 119; am 10/21/92, Register 124; am 4/3/94, Register 129

Authority: AS 21.06.090

AS 21.34.020

AS 21.34.080

AS 21.34.250

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Last modified 7/05/2006