Recent Cases

Silvers v. State Board of Equalization (9/30/10) Surplus line insurance premiums are subject to a statutorily based 3 percent surplus line premium tax but are not subject to an additional 2.35 percent premium tax because issuance of surplus line policies does not constitute business done in California. The Court made it clear that the Surplus Line Broker operated under authorization of legislature in representing the non-admitted insurance company in reaching its decision.

Troyk v Farmers Group, Inc (Prematic Service Corporation) (12/09/08 Fourth District, Division One; Insurance Code Section 381(f); (Class Action) Insurer may be liable for restitution under the Unfair Competition Law for service payments tendered even though insurer did not directly recieve payments from insureds.

Insurer's agent in billing and collecting servces charges from insureds may be liable on same basis as insurer. This was a procedural ruling; however, it reflects the direction the courts will move in situations which are similar and commonplace in the Excess and Surplus Lines Marketplace.

AEA Insurance Company, Ltd. v John Garamendi, 4th Appellate District, Division 1, (Unpublished) Reflects the limits of California Insurance Code Section 35 (d) in defining activities which require a license from the California Insurance Commissioner. The Commissioner is attempting to expand the scope of the activities of a Wholesaler or a Surplus Line Broker can engage in the day to day operations of its office.