Monitoring the Financial Solvency of Foreign, Alien and Health Insurers (Follow-Up Review) Insurance companies domiciled in a state other than New York are classified as foreign insurers, while insurance companies domiciled outside the United States are classified as alien insurers. Insurance companies providing coverage to hard-to-place risks not covered by the standard market are called excess line insurers. In our prior audit report 97-S-23, issued in August 1998, we examined the procedures used by the Department to monitor the financial solvency of foreign insurers, alien insurers, excess line insurers, and health insurers. We concluded that foreign and alien insurers were subject to the same degree of Department supervision as insurers domiciled in New York State. However, excess line insurers were not subject to the same degree of supervision, and as a result, if one of these insurers defaulted, its policyholders were subject to additional risk that their valid claims would not be paid. We also found that the financial statements required by the Department were often submitted late by health insurers. In our follow-up review, we found that Department officials have taken steps to address most of these concerns.
For a complete copy of Report 99-F-36 click here.