- Florida maintains a list of eligible surplus lines insurers (see Other Comments section #8).
- Florida does have a Surplus Lines Association/Stamping Office, the Florida Surplus Lines Service Office (FSLSO) (see Other Comments section #3).
- Florida does not have an Export List (see Other Comments section #9).
- Florida does not have an industrial insured exemption statute related to Surplus Lines Insurance but otherwise recognizes the exempt commercial purchaser exemption under NRRA.
- Surplus lines tax: 4.94% plus 0.06% service fee paid by the insured to the surplus lines agent, who remits to the FSLSO.
- Florida adopted NIMA (SB 1816); however, the Board of Directors of NIMA voted on April 28, 2016 to discontinue operations and dissolve the NIMA, Inc. organization. No multistate business, renewal or reinstatement transactions effective on or after October 1, 2016 will be accepted through the Surplus Lines Clearinghouse multistate reporting platform. New, renewal or reinstatement transactions on or after October 1, 2016 with exposure in more than one jurisdiction should be reported directly to the home state’s reporting mechanism.
- Florida does not allow domestic surplus lines insurers in the state.
Eligibility and Filing Requirements (All Insurers):
In order for a surplus lines insurer to be on Florida’s list of eligible surplus lines insurers, it must go through the same eligibility application process prior to implementation of NRRA and submit the filings listed below. These insurers will be identified on the Office of Insurance Regulation (“Office”) website, under “Company Type”, as “Surplus Lines”. If an alien surplus lines carrier intends to operate in Florida pursuant to NRRA and notifies the Office of its intention to do so, then the Office will require completion of a Service of Process form by the insurer. In order to be made eligible by the Office, such insurer is required to provide detailed background information on its officers, directors, and certain shareholders and is subject to a financial review as part of the application process.
- Application: includes service of process form.
- Annual Statement/Report: certified and converted to U.S. dollars.
- Biographical affidavits: investigative background report and fingerprint cards also required.
- Certificate of Authority.
- Gross Premium Report (filed electronically) due quarterly for foreign surplus lines insurers and annually for alien surplus lines insurers. Report must include risks exempt from surplus lines tax.
- Previous Operating History. There is also the Surplus Lines – Federally Authorized process wherein an unauthorized insurer notifies the Office of its intent to write certain property and casualty insurance not written by admitted/authorized insurers. Surplus Lines – Federally Authorized do not file an application with the Office, and as such, do not provide detailed background information on its officers, directors, and certain shareholders and is not subject to financial review by the Office prior to conducting business in Florida. Filing requirements include
- UCAA Form 12.
- Business Plan.
- Letter of Intent.
- Lines of Business.
- Authorization Letter.
- Certificate of Compliance.
Eligibility and Filing Requirements (Alien Insurers Only):
- Trust Fund: $5,400,000 (not required for alien insurers writing ocean marine and/or aviation risks only).
- Capital and Surplus: $15,000,000 in aggregate.
- IID Financial Format (Electronic filing is required): due July 31.
- Electronic premium submission: due June 30.
Alien surplus lines insurers that notify the Office of their intention to operate under NRRA will be identified on the Office’s website as “Surplus Lines – Federally Authorized”.
Eligibility and Filing Requirements (Foreign Insurers Only):
- Report of Examination.
- Certificate of Compliance.
- Quarterly Financial Statements and most recent annual statement.
- Report of Auditors.
- Surplus: $15,000,000.
- Verified report of all surplus lines insurance Transacted for insurance risks located in Florida during each calendar quarter must be filed with the FSLSO on or before the end of the month following each calendar quarter.
Types of Insurance Exempted from Surplus Lines Regulation:
- Commercial wet marine and transportation risks (see Other Comments section #1).
- Aviation risks, including airport and products liability incidental thereto and hanger keepers liability (see Other Comments Section #1).
Other Comments or Requirements:
- Exempted coverages listed above may be exported under the following requirements: placement through a licensed Florida surplus lines agent and with an insurer made eligible by the Florida Office of Insurance Regulation for such coverages based on finding that insurer is able to meet its financial obligations. Most classes of aviation and wet marine are exempt from Florida surplus lines tax; however, personal & pleasure aircraft and personal & pleasure boats and yachts are taxable classes. All such classes unless they are governmental would be subject to the current Florida Surplus Lines Service Office fee and any other applicable assessments. Currently the only applicable assessment in Florida is the Emergency Management Preparedness Act, which is $2.00 (personal lines) and $4.00 (commercial lines) flat fee at policy inception. This fee would not be applicable to aviation or wet marine. Aviation and wet marine are not subject to the diligent effort search requirement.Sec. (FLDOI) 626.918 (5) of the Florida Insurance Code also allows a Florida surplus lines agent to place a risk, in whole or in part, with an unauthorized insurer (i.e., one not on the Florida eligibility list) that is otherwise eligible for export in the surplus lines market, but can not be procured from eligible surplus lines insurers, as long as certain conditions are met. These conditions include: 1) A signed statement from the Florida agent with the Florida Office of Insurance Regulation (OIR) setting forth such facts and the % of the risk placed with the unauthorized insurer; 2) a $50,000 deposit with the FLDOI by the unauthorized insurer for each such risk; 3) the filing by the Florida agent of a certified copy of the insurer’s statement of condition as of year end showing that the insurer has net assets at least equal to the amount required for licensed companies in the state; 4) a signed statement by the insured contained in the policy, binder or cover note, confirming, among other things, that the insured is aware that the insurer in question is not approved in Florida.
However, subsection (6) of this section states that when not more than 12.5% of the risk is so eligible for placement with an unauthorized insurer in Florida under subsection 5 of this statute, than the OIR may, at its discretion, only require the agent to obtain a signed statement as noted in item 4 above before placing the risk.
- Insurer must have three years business history (requirement may be waived if insurer provides not readily available product or has operated for one year and has combined capital and surplus of $25,000,000).
- Contact information for the FSLSO is as follows:
Florida Surplus Lines Service Office
Gary D. Pullen, Executive Director
1441 Maclay Commerce Drive, Suite 200
Tallahassee, Florida 32312
Tel.: (850) 224-7676
Fax.: (850) 513-9624
E-mail: [email protected]
- Florida allows for the issuance of a non-resident surplus lines agent license to a non-resident individual provided that the individual is licensed in his or her home state as a resident general lines and a resident surplus lines agent. There is an additional requirement that, under the laws of the individual’s home state, residents of Florida may be licensed in a similar manner as a non-resident surplus lines agent in the applicant state.
- Links to information concerning those companies eligible to do business in Florida is contained at the following website of the Florida Surplus Lines Service Office. https://www.fslso.com/compliance/eligible-insurers.
- Florida does not have an export list per se, but rather an amendment was made in 2011 to the statutory provisions contained in §626.916 (3)(b) exempting certain deregulated commercial lines coverages from the diligent search requirement. A link to these deregulated commercial lines coverages can be found at: https://www.fslso.com/compliance/diligent-effort. This exemption applies to classes of insurance which are referenced in § 627.062(3)(d)1 as exempt from rate regulation as well as insurance related to the indemnity of deductibles for property insurance. These classes may be exportable under the following conditions:
• the insurance must be placed only by or through a surplus lines agent licensed in this state;
• the insurer must be made eligible under § 626.918;
• the insured has signed or otherwise provided documented acknowledgment of a disclosure in substantially the following form: “You are agreeing to place coverage in the surplus lines market. Coverage may be available in the admitted market. Persons insured by surplus lines carriers are not protected under the Florida Insurance Guaranty Act with respect to any right of recovery for the obligation of an insolvent unlicensed insurer;” and
• if the disclosure is signed by the insured, the insured is presumed to have been informed and to know that other coverage may be available, and, with respect to the diligent-effort requirement under subsection (1), there is no liability on the part of, and no cause of action arises against, the retail agent presenting the form.
- Any eligible surplus lines insurer who fails to file a report in the form and within the time required or provided for in the Surplus Lines Law may be fined up to $500 per day for each day such failure continues, beginning the day after the report was due, until the date the report is received. Failure to file a report may also result in withdrawal of eligibility as a surplus lines insurer in this state. All sums collected by the DFS under this section shall be deposited into the insurance Regulatory Trust Fund. sec. 626.9361 Florida Insurance Code.
- The Florida legislature enacted the following legislation in 2009:• Section 626.913(4), Florida Statutes, was added which states “Except as may be specifically stated to apply to surplus lines insurers, the provisions of chapter 627 do not apply to surplus lines insurance authorized under ss. 626.913-626.937, the Surplus Lines Law. Chapter 627 is titled “Insurance Rates and Contracts”.• Section 626.924(2), Florida Statutes, was added which states “Surplus lines policies issued on or after October 1, 2009, shall have stamped or printed on the face of the policy in at least 14-point, boldface type, the following statement: SURPLUS LINES INSURERS’ POLICY RATES AND FORMS ARE NOT APPROVED BY ANY FLORIDA REGULATORY AGENCY”.• Section 626.9371, Florida Statutes, was added and states:(1) The premiums for surplus lines insurance contracts issued on or after October 1, 2009, in this state or covering risks located in this state shall be paid in cash consisting of coins, currency, checks, or money orders or by using a debit card, credit card, automatic electronic funds transfer, or payroll deduction plan.(2) All payments of claims made in this state under any contract of surplus lines insurance issued on or after October 1, 2009, shall be made:a) In cash consisting of coins, currency, checks, drafts, or money orders and, if made by check or draft, shall be in such form as will comply with the standards for cash items adopted by the Federal Reserve System to facilitate the sorting, routing, and mechanized processing of such items; or b) By debit card or any other form of electronic transfer if authorized in writing by the recipient or the recipient’s representative. Any fees or costs to be charged against the recipient must be disclosed in writing to the recipient or the recipient’s representative at the time of written authorization. However, the written authorization requirement may be waived by the recipient or the recipient’s representative if the insurer verifies the identity of the insured or the insured’s recipient and does not charge a fee for the transaction. If the funds are misdirected, the insurer remains liable for the payment of the claim.• Section 626.9372, Florida Statutes, was added and states:(1) Each insurer that provides or may provide liability insurance coverage to pay all or a portion of any claim that might be made under surplus lines policies issued on or after October 1, 2009, shall provide, within 60 days after the written request of the claimant, a statement of a corporate officer or the insurer’s claims manager or superintendent setting forth the following information with regard to each known policy of insurance, including excess or umbrella insurance:a) The name of the insurer.b) The name of each insured.c) The limits of the liability coverage.d) A statement of any policy or coverage defense that such insurer reasonably believes is available to such insurer at the time of filing such statement.e) A copy of the policy. In addition, the insured, or her or his insurance agent, upon written request of the claimant or the claimant’s attorney, shall disclose the name and coverage of each known insurer to the claimant and forward such request for information as required by this subsection to all affected insurers. The insurer shall supply the information required in this subsection to the claimant within 60 days after receipt of such request.(2) The statement required by subsection
a) Must be amended within 60 days after the date of discovery of facts necessitating an amendment to such statement.
• Section 626.9373, Florida Statutes, was added and states:
(1) Upon the rendition of a judgment or decree by any court of this state against a surplus lines insurer in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer on or after the effective date of this act, the trial court or, if the insured or beneficiary prevails on appeal, the appellate court, shall adjudge or decree against the insurer in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the lawsuit for which recovery is awarded. In a suit arising under a residential or commercial property insurance policy not brought by an assignee, the amount of reasonable attorney fees shall be awarded only as provided in section 57.105 or section 627.70152, as applicable.
(2) If awarded, attorney’s fees or compensation shall be included in the judgment or decree rendered in the case.
• Section 626.9374, Florida Statutes, was added and states:
(1) Any surplus lines, personal lines residential property insurance policy issued on or after October 1, 2009, containing a separate hurricane or wind deductible must on its face include in at least 14-point, boldface type the following statement: THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE OR WIND LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.
(2) A surplus lines, personal lines residential property insurance policy issued on or after October 1, 2009, containing a coinsurance provision applicable to hurricane or wind losses must on its face include in at least 14-point, boldface type the following statement: THIS POLICY CONTAINS A CO-PAY PROVISION THAT MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.
- Florida surplus lines agents and Independently Procured Coverage (IPC) filers are not required to report Non-US premium allocations on multi-state policy filings to the Florida Surplus Lines Service Office (FSLSO). Non-US premium is defined as premium charged on exposures occurring or located outside of the United States and its territories.
- 627.715(4) An agent may export a contract or an endorsement providing flood coverage to an eligible surplus lines insurer without making a diligent effort to seek such coverage from three or more authorized insurers under s. 626.916(1)(a).
- All policies (excluding the exempt commercial wet marine and transportation) are subject to the following statute: 626.916(1)(e) The insured has signed or otherwise provided documented acknowledgment of a disclosure in substantially the following form: “You are agreeing to place coverage in the surplus lines market. Coverage may be available in the admitted market. Persons insured by surplus lines carriers are not protected under the Florida Insurance Guaranty Act with respect to any right of recovery for the obligation of an insolvent unlicensed insurer.”
- Under F.S. 627.062, agents are not required to complete a Diligent Effort form (showing declinations from 3 licensed carriers) prior to the placement of the following commercial classes of coverages:
• Excess or Umbrella
• Surety and Fidelity
• Boiler and Machinery and Leakage and Fire Extinguishing Equipment
• Errors and Omissions
• Directors and Officers, Employment Practices, and Management Liability
• Intellectual Property and Patent Infringement
• Advertising Injury and Internet Liability
• Property risks rated under a highly protect risks rating plan
• Fiduciary Liability
• General Liability
• Nonresidential Property (except for collateral protection insurance as defined in F.S. 624.6085)
• Nonresidential Multi-Peril
• Excess Property
• Burglary and Theft
• Travel insurance, if issued as a master group policy with a situs in another state where each certificateholder pays less than $30 in premium for each covered trip and where the insurer has written less than $1 million in annual written premiums in the travel insurance product in this state during the most recent calendar year.
• Medical malpractice for a facility that is not a hospital licensed under chapter 395, a nursing home licensed under part II of chapter 400, or an assisted living facility licensed under part I of chapter 429
• Medical malpractice for a health care practitioner who is not a dentist licensed under chapter 466, a physician licensed under chapter 458, an osteopathic physician licensed under chapter 459, a chiropractic physician licensed under chapter 460, a podiatric physician licensed under chapter 461, a pharmacist licensed under chapter 465, or a pharmacy technician registered under chapter 465
• Any other commercial lines categories or kinds of insurance or types of commercial lines risks that the office determines should not be subject to paragraph (2)(a) or paragraph (2)(f) because of the existence of a competitive market for such insurance or similarity of such insurance to other categories or kinds of insurance not subject to paragraph (2)(a) or paragraph (2)(f), or to improve the general operational efficiency of the office.For the above risks, a signed disclosure statement is required in place of the Diligent Effort form.
- Each surplus lines agent through whom a surplus lines coverage is procured must write or print on the outside of the policy and on any certificate, cover note, or other confirmation of the insurance his or her name, address, and identification number and the name and address of the producing agent through whom the business originated and must have stamped or written upon the first page of the policy or the certificate, cover note, or confirmation of insurance the words:
“THIS INSURANCE IS ISSUED PURSUANT TO THE FLORIDA SURPLUS LINES LAW. PERSONS INSURED BY SURPLUS LINES CARRIERS DO NOT HAVE THE PROTECTION OF THE FLORIDA INSURANCE GUARANTY ACT TO THE EXTENT OF ANY RIGHT OF RECOVERY FOR THE OBLIGATION OF AN INSOLVENT UNLICENSED INSURER.”
- The Florida Legislature enacted legislation in 2012 which eliminates the bond requirement for non-resident brokers.
- The Florida Legislature enacted the following legislation in 2014 with regard to non-resident agent licensing requirements.• the Non-Resident Surplus Lines Licensing laws Florida Statutes 626.9272 were amended. The new language removes the required experience, coursework and examination for those agents located in a state that a Surplus Lines exam is required for licensure. Please consult the Florida Department of Financial Services website for further details.
• Florida Statute 627.952 was amended to require non-resident agents representing Florida Risk Purchasing Groups, to be licensed and appointed as a Florida non-resident surplus lines agent and removes the current fidelity bond requirement.
- The Florida Legislature enacted legislation in 2019 which makes the following changes to the Florida surplus lines law effective 7/01/19:
- Lowers the threshold for the dwelling replacement cost of a residential structure from $1 million to $700,000 or more when only one declination is required 626.914(4)
- Eliminates the $35 cap on the policy fee. The new legislation allows the surplus lines agent to charge a reasonable policy fee which must be itemized separately to the customer before purchase and enumerated in the policy. 626.916 (4)
- The retail agent may charge a reasonable per-policy fee for placement of the surplus lines policy. This fee must be itemized separately to the customer before purchase. 626.916 (5)
- Florida will withdraw from the Nonadmitted Insurance Multi-State Agreement (NIMA) effective 6/1/2016, via a bulletin issued by the FLSLO dated 4/13/2016. All multistate policies issued or renewed on or after 6/1/2016, and any subsequent endorsements to those policies, for which Florida is the home state, will now be filed with FSLSO and not through the Surplus Lines Clearinghouse. All Florida home state new and renewal policies with an effective date prior to 6/1/2016, as well as any endorsements to new renewal policies effective prior to 6/1/2016, will be filed with the Surplus Lines Clearinghouse through 5/31/2017.