Stamping Offices                      

Stamping Offices play a vital role in overseeing excess & surplus lines transactions in 14 states and oversee a majority of transactions. NAPSLO and the American Association of Managing General Agents (AAMGA) support the creation and operation of state stamping offices and developed a position paper outlining their views.

Stamping offices help prevent or stop the use of ineligible insurers from transacting business in the surplus lines market and to monitor and evaluate eligible insurers for financial security. The methods used vary from conducting a substantial security review of foreign and alien insurers with regard to financial condition, reputation, integrity and operations (such as by the Excess Line Association of New York) to monitoring transaction documentation for use of only white listed companies.  Each state stamping office has resources available to their licensees regarding non-admitted insurer eligibility. State stamping offices should have statutory immunity so this service can be performed unrestrained and free from threat of litigation.

E&S brokers initiated this form of self-regulation to foster and facilitate compliance with the governing law.  By offering the public a greater level of protection, the industry also achieved a greater level of success and acceptability.  The E&S broker community was able to create a self-governing dynamic which provides consumer protection to those with E&S insurance needs without changing the marketplace's essential character, simultaneously avoiding a traditional regulatory approach.     

The 14 states with Stamping Offices are Arizona, California, Florida, Idaho, Illinois, Mississippi, Minnesota, Nevada, New York, Oregon, Pennsylvania, Texas, Utah, and Washington. (A list of offices is available for download.)

History
In a number of states, prior to the creation of the stamping office, clerical errors or inadvertent regulatory violations often resulted in immediate fines, stipulations or other regulatory jeopardy.  By placing the stamping office between licensee and regulator, the licensee has a member-service oriented facility which can provide information, guidance and education on issues unique to surplus lines and offer helpful corrections not under threat of fine or license jeopardy.  The stamping office therefore provides a help desk function of information and education to assist with compliance while the insurance department retains ultimate enforcement authority.

In the 1930s, the E&S brokers of California, Oregon and Washington were pioneers in creating and realizing the stamping office concept formed voluntary surplus line broker associations which helped set standards by which unlicensed insurers and surplus line brokers  could verify each others qualifications to underwrite or place excess and surplus lines.   The utility of the stamping office approach continues to attract new states today and the state stamping offices currently operating today review approximately 80 percent of all E&S insurance placements.