Appleton Rule

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Definition: Appleton Rule

Introduced in early 1900’s by Henry D. Appleton (a New York Deputy Superintendent of Insurance), Appleton rule states that all insurance companies doing business in New York must abide by New York legislation (strictly complying with the New York Insurance code) irrespective of whether they did business in other states as well.

Although it was welcomed by the state of New York, it was disliked by many insurance commissioners could not introduce new rules or regulations contrasting to the Appleton Rule.

For instance, only ‘monoline’ insurers were allowed to provide financial guaranty insurance while ‘multiline’ companies were prohibited from doing so even though they were licensed in New York (being incorporated elsewhere). Monoline companies are the ones which are into only one business line i.e. financial guaranty insurance.


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