Insurance Industry Development For Fall 2008

Essex v. Zota: Florida Surplus Lines Exemption Under Attack
By Austin B. Neal and Kevin G. Fitzgerald

The broad exemption historically applied to surplus lines insurance under Florida law was recently called into question by the decision of the Florida Supreme Court (Court) in Essex Insurance Company v. Mercedes Zota (Case No. SC06-2031). In Essex, the Court answered one of five questions certified to it by the United States Court of Appeals for the Eleventh Circuit: Whether the provisions embodied in Section 626.922, Florida Statutes (requiring surplus lines insurers to issue and deliver insurance policies) or Section 627.421 (requiring licensed insurers to deliver insurance policies to insureds within a specified timeframe) require a surplus lines insurer to deliver the policy directly to an insured and not just to the insured's agent. The Court answered in the negative, upholding the common law rule that delivery to the insured's agent was sufficient.