A discussion of the history of insurance in the U.S. always seems to start with the beginnings of Lloyd's of London. Although Lloyd's is a major factor in the development of surplus lines in our country, for this article we shall dispense with that history and deal with ours here in the Sunshine State. However, to understand surplus lines in Florida, we must first understand the development of surplus lines in the U.S.

Insurance in the U.S. began in 1752 with the formation of the Philadelphia Contributorship, which was created to insure houses from the peril of fire. There were no insurance departments and no licensing. It was not until 1851 that New Hampshire created the first full-time Board of Insurance Commissioners. In 1871, what became the National Association of Insurance Commissioners (NAIC) was formed, initially with 17 members. Surplus lines, however, began to develop earlier than that.

In 1835, the great New York fire wiped out some $28 million in insurance capital; ten years later another fire caused approximately $4 million more to disappear. The Chicago fire of 1871 caused 60 insurance companies to go under with a loss of $40 million. In 1872, the Boston fire took out another 32 companies and cost $38 million.