May 5, 1958



Dear Sir:

This will supplement our circular letter of February 20 of this year which treated with the practice of so-called "fronting" or "filing".

In such letter we explained the position of this Department in respect to the said practice. We also directed any authorized insurer which has been or is "fronting" or "filing" in this State for an unauthorized insurer to discontinue such activity immediately.

It has now become apparent from responses to such communications, as well as from other correspondence reaching this office, that some of our domestic insurers are "fronting" or "filing" for unauthorized insurers in other states in possible violation of the laws of such other states. Just as we pointed out that such practice is violative of the laws of this State, so too would it appear to contravene the laws of other states containing provisions similar to those found in Section 112 of the New York Insurance Law to which we referred in our letter of February 20.

In the premises, the directive as above is hereby extended to cover "fronting" or "filing" activities in every state in which an insurer is authorized to transact business unless specific advices have been obtained from the insurance supervisory official of the state in which the "fronting" or "filing" has been effected that such practice is not contrary to the laws or rules of such state.

Please acknowledge receipt of this letter and advise as to how you propose to treat business of the type described herein, which may now be on your books.

Very truly yours,


First Deputy Superintendent