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Todd SchultzI don't believe it to be a big deal. As you know, states regulate insurers, who in turn use various underwriting processes to assess risks and charge premiums. The underwriting practices are largely uniform and familiar to those in the insurance industry, at least when you're dealing with standard life, casualty, health and auto insurance. Thus regulators can review insurance policies to see if coverage seems rational, fair, and the type contemplated by consumers, and if exclusions or limitations reflect what is commonly seen in the industry.
Surplus lines like the policy you have with CIA offer coverage for nonstandard or unique risks. They simply don't fit into the normal underwriting process of risk assessment. As such, there are ususally niche insurance carriers to address these and offer coverage. These surplus lines insurers are generally not licensed or approved through the "normal" regulatory process, as States do not want to spend extensive resources analyzing the underwriting process on an ad hoc basis for such variable risks. Still, States will allow insurers to issue surplus lines policies, often on condition that the policy state some sort of disclaimer that the insurer has not been approved or licensed by the State, and that the insured understands that. I believe that's all we have here. Basically, it's a big "caveat emptor" to those contemplating such insurance that the State has not reviewed it and will probably not be there for relief if you have problems.
Hope this makes sense.