Insurance Department

Monitoring the Financial Solvency of Foreign, Alien and Health Insurers

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. We examined the procedures used by the Insurance Department to monitor the financial solvency of foreign insurers, alien insurers, excess line insurers, and health insurers. We conclude that foreign and alien insurers are subject to the same degree of Department supervision as insurers domiciled in New York State. However, excess line insurers are not subject to the same degree of supervision, and as a result, if one of these insurers defaults, its policyholders are subject to additional risk that their valid claims will not be paid. We also found that the financial statements required by the Department are often submitted late by health insurers.

For a complete copy of Report 97-S-23 click here.
For a copy of the associated follow-up report click here.