Comparison Summary of Types of Insurers

Description

Guarantee Fund (CIGA) Protection

 

 

 

 

 

Department of Insurance Scrutiny

 

 

 

Rate and Form Approval

Financial Examinations

Procurement of Policy

 

 

Governing Law

Admitted Insurers

 

An insurer authorized by the California DOI to issue policies to California residents.

 

 

 

 

 

 

Member of CIGA, so insureds may be afforded protection by CIGA if insurer becomes insolvent.

Substantial DOI scrutiny, including mandatory reporting, claim audits, audits of underwriting and market conduct.

Must submit rate schedules and policy forms to DOI for approval.

 

 

Proof of financial stability must be submitted to DOI; files quarterly and annual financial statements with DOI.

 

Directly or through agent or broker.

Subject to all insurance laws and regulations of the State of California.

Non-Admitted Insurers

 

 

 

 

 

Alien or foreign insurer not admitted in California, but listed in the DOI's List of Eligible Surplus Lines Insurers.

Not a member of CIGA, so no guarantee fund to protect insureds if insurer becomes insolvent.

DOI does not regulate rates or audit underwriting or market conduct.

No required DOI approval of rate schedules and policy forms.

 

 

DOI does not conduct financial examination; surplus lines broker not a guarantor of financial stability of non-admitted insurer.

 

Must utilize surplus lines broker.

Subject to laws of its domicile; not subject to all California insurance laws and regulations.

Risk Retention Groups & Risk Purchasing Groups

 

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.

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.

DOI does not regulate rates or audit underwriting or market conduct.

No required DOI approval of rate schedules and policy forms.

DOI may examine an RRG's financial condition only if RRG's state of domicile refuses to conduct examination.

Membership in RRG or RPG required.

Governed by Risk Retention Act; not subject to all California insurance laws and regulations.

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William & Christopher Insurance Brokers, Inc.
 P.O. Box 11862
Newport Beach, CA 92658-5044

P (949) 858-1759
 
wcibinc@cox.net