The Insurance Law permits insurance companies to obtain special licenses that allow them to sell insurance for special risks without first filing the applicable rate schedule or obtaining the Department of Financial Services' approval of the policy form. The market in which this type of special risk insurance is sold is often referred to as the "Free Trade Zone".

Any commercial policy that generates annual premiums of at least $100,000 for one kind of insurance or $150,000 in the aggregate for more than one kind of insurance (if no single kind exceeds $100,000) is eligible to be sold in the Free Trade Zone. Additionally, a policy, other than for medical malpractice insurance, issued to a large commercial insured that employs or retains a special risk manager to assist in the negotiation and purchase of the policy is also eligible. Lastly, unusual kinds of commercial insurance and coverages that are difficult to place may be sold in this manner. The Department maintains a list of unusual or difficult-to-place coverages that may be sold in the Free Trade Zone. The list of eligible coverages is updated periodically. If the policy does not meet the above premium or large commercial insured requirements, the type of coverage must appear on this list in order for the policy to be eligible to be issued in the Free Trade Zone.

The Free Trade Zone's exemption from filing requirements allows insurance companies to respond quickly to requests for coverage, and to tailor the policy language to the particular needs of the buyer. Although the policy and rates are not reviewed by the Department of Financial Services, they must meet the standards of the law and regulations that apply to all policies.

Any policy issued in this manner must display a notice on the front page that states that the policy forms and rates are exempt from the Department of Financial Services' filing requirements. The notice must also inform you that the forms and rates must meet the minimum standards of the Insurance Law and applicable Department regulations.