Operating as an insurance carrier in the United State requires adherence to a variety of statutory and administrative regulations that ensure consumer protection and financial stability. Alien insurers or foreign insurers seeking to operate in New Jersey must meet certain solvency criteria. If the Department of Insurance deems the capital of a stock insurer or surplus of a mutual to be impaired and/OR the applicant carrier does not meet the three-year seasoning requirement, then the Department will impose a surety bond requirement. The primary purpose of requiring an alien or foreign insurer to post a surety bond is to protect the interests of policyholders and the local market from carrier default(s). The instrument acts as a safety net, ensuring that if the insurer fails to meet its obligations that the obligee (the State of New Jersey) has financial recourse to cover potential damages, claims, and/or unpaid taxes. The language of the obligation is instructive.
"Pursuant toe NJSA 17:30C-a(a), " . . . the capital of a stock insurer or the surplus of a mutual insurer shall be deemed impaired when such insurer is not possessed of assets of at least equal to all liabilities and required reserves together with its total issued and outstanding capital stock of a stock insurer, or the minimum surplus if a mutual insurer required by law to be maintained for the kind(s) of insurance it is then authorized to transact;", and "NJAC 11:1-10.4(a)5iii(4), . . . the Commissioner may waive the three year seasoning period if such insurer applying for admission in New Jersey obtains a surety bond issued by an insurance company licensed in the State of New Jersey and approved by the Commissioner, for the protection of the New Jersey policyholders, claimants and creditors of the insurance company."
New Jersey surety bond leader, Surety One, Inc. is a specialist in the surety bonding needs of insurance companies and intermediaries. We offer both the surety bonds and fidelity bonds needed by these parties in all fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about this surety bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat. A New Jersey surety bond for an alien or foreign insurer is quick, easy and processed "same day".
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