Chapter 04 - Uniform Unauthorized Insurers Act

Chapter 04 - Uniform Unauthorized Insurers Act

29.0401 Short title.


This chapter may be cited as the “Uniform Unauthorized Insurers Act”.

29.0402 Interpretation and construction.


This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states and territories which enact it.

29.0403 Representing or placing insurance with unauthorized insurers prohibited.


No person, corporation, association or partnership may, in this Territory, act as agent for any insurer not authorized to transact business in this Territory, or negotiate for or place or aid in placing insurance coverage in this Territory for another with any such insurer.

29.0404 Aiding unauthorized insurers prohibited.


No person, corporation, association, or partnership may, in this Territory, aid any unauthor-ized insurer in adjusting insurance or in transacting insurance business in this territory, either by fixing rates, by adjusting or investigating losses, by inspecting or examining risks, by acting as attorney-in-fact or as attorney for service of process, or otherwise, except as provided in 29.0407 through 29.0410.

29.0405 Representing or aiding insured in effecting insurance on property or risk in unauthorized state.


No person, corporation, association, or partnership may make, negotiate for or place, or aid in negotiating or placing, any insurance contract in this territory for another who is an applicant for insurance covering any property or risk in another state, territory, or district of the United States with any insurer not authorized to transact insurance business in the state, territory, or district wherein such property or risk or any part thereof is located.

29.0406 Exceptions.


The provisions of 29.0403 through 29.0405 do not apply to contracts of reinsurance or to contracts of insurance covering risks of transportation and navigation, or to contracts of insurance made through authorized surplus line brokers or agents, nor do they apply to an insurer not authorized in this Territory, or its representatives, in investigating, adjusting losses or otherwise complying in this Territory with the terms of its insurance contracts made in a state wherein the insurer was authorized and in which the property or risk was located or residing at time of the execution of the contract.

29.0407 Service of process-Interpretation.


The transacting of business in this territory by a foreign or alien insurer without a certificate of authority and the issuance or deliver by such foreign or alien insurer of a policy or contract of insurance to a citizen of this Territory or to a resident hereof, or to a corporation authorized to do business herein, is equivalent to an appointment by such insurer to the Commissioner and his successor or successors in office, to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit or proceeding arising out of such policy or contract of insurance, and the issuance or delivery is a signification of its agreement that any such service or process is of the same legal force and validity as personal service of process in this Territory upon it.

29.0408 Service of process-Procedure and payment of fees.


Service of process shall be made by delivering and leaving with the Commissioner, or to some person in apparent charge of his office, 2 copies thereof and the payment to him of such fees as may be prescribed by law. The Commissioner shall forthwith mail by registered mail one of the copies of such process to the defendant at his last known principal place of business and shall keep a record of all processes so served upon him. Such service of process is sufficient provided notice of such service and a copy of the process are sent within 10 days thereafter by registered mail by plaintiffs attorney to the defendant at his last known principal place of business, and the defendant’s receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender at the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiffs attorney showing a compliance herewith, are filed with the clerk of the High Court where such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow. However, no plaintiff or complainant shall be entitled to a judgment by default, or a judgment with leave to prove damages, or a judgment pro confessor under 29.0407 through 29.0410 until the expiration of 30 days from date of the filing of the affidavit of compliance.

29.0409 Service of process-Validity.


Service of process in any such action, suit or proceedings is, in addition to the manner pro-vided in 29.0408, valid if served upon any person within this Territory who, in this Territory, on behalf of such insurer, is soliciting insurance, making any contract of insurance or issuing or delivering any policies or written contracts of insurance, or collecting or receiving any premium for insurance, and a copy of such process is sent within 10 days thereafter by registered mail by the plaintiff’s attorney to the defendant at the last known principal place of business of the defendant, and the defendant’s receipt, or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff’s attorney showing a compliance herewith, are filed with the clerk of the High Court where such action is pending on or before the date the defendant is required to appear, or within such further time as the court may allow.

29.0410 Service of process-Limitation or abridgement of rights.


Nothing in 29.0407 through 29.0409 limits or abridges the right to serve any process, notice or demand upon any insurer in any other manner now or hereafter permitted by law.

29.0411 Certificate of authority required.


No unauthorized insurer may institute or file, or cause to be instituted or filed, any suit, action or proceedings in this Territory to enforce any right, claim or demand arising out of the transaction of business in this Territory until such insurer has obtained a certificate of authority to transact insurance business in this Territory.

29.0412 Defense of action by unauthorized insurer.


(a) Before any unauthorized insurer may file or cause to be filed any pleading in any action, suit or proceeding instituted against it, such unauthorized insurer shall either:

(1) file with the clerk of the High Court a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in such action; or

(2) procure a certificate of authority to transact the business of insurance in this Territory.

(b) The court in any action, suit, or proceeding, in which service is made in the manner pro-vided in 29.0408 or 29.0409, may order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with the provisions of subsection (a) and to defend such action.

(c) Nothing in subsection (a) is to be construed to prevent an unauthorized insurer from filing a motion to quash a writ or to set aside service thereof made in the manner provided in 29.0408 or 29.0409 on the ground either:

(1) that no policy or contract of insurance has been issued or delivered to a citizen or resident of this Territory or to a corporation authorized to do business therein; or

(2) that such insurer has not been transacting business in this Territory; or

(3) that the person on whom service was made pursuant to 29.0409 was not doing any or the acts therein enumerated.

29.0413 Violation-Penalty.


Any person violating 29.0403 through 29.0412 is guilty of a class B misdemeanor and shall upon conviction be sentenced accordingly.