California Code, Insurance Code - INS § 1780.50

(a) The Legislature finds and declares that consumers in the State of California have insurance needs which cannot always be met through the admitted insurance market.  For this reason, many insurance consumers need access to insurance underwritten by nonadmitted insurers, as permitted by law.  To help ensure that insurance consumers have access to financially sound and reputable nonadmitted insurers, it is in the public interest to authorize a surplus line advisory organization within the State of California to perform certain duties delegated by the Insurance Commissioner, as provided in this chapter.

(b) The Legislature further finds and declares that it is in the public interest for the surplus line advisory organization authorized under this chapter to be composed of surplus line brokers or persons involved in the business of surplus line insurance.  The advisory organization's activities shall constitute an integral part of the business of insurance.  The advisory organization will facilitate the state's ability to monitor and regulate the transfer of risk on a sound basis through surplus line brokers to nonadmitted insurers in accordance with Chapter 6 (commencing with Section 1760) and may perform certain functions in this state's system of monitoring and regulating the persons and entities involved in this state in the surplus line segment of the insurance industry.

(c) The Legislature further finds and declares that the authorization of a surplus line advisory organization to perform the duties delegated by the Insurance Commissioner, as provided in this chapter, will further the policies of the State of California expressed in the findings set forth in this section.  The oversight, supervision, and examination by the Insurance Commissioner provided for in this chapter are intended to subject the activities of the advisory organization to active state supervision.

(d) The Legislature further finds and declares that, as it is the obligation and duty of the elected Insurance Commissioner to regulate the business of insurance in the State of California, it is in the public interest to grant the Insurance Commissioner the authority and discretion to utilize the expertise and knowledge of a surplus line advisory organization to assist in carrying out that responsibility, as provided in this chapter.