Compliance FAQs

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What entities are considered exempt from surplus lines tax?

In order to be exempt from surplus lines tax, the entity should be a governmental (state, county, municipality) entity. Non-profit 501(c)(3) organizations are typically exempt from sales tax but are not exempt from surplus lines tax unless proven otherwise by the entity and their filing surplus lines agent. 

Vessels, cargo, and aircraft risks as described under F.S. 626.917 are also exempt from the surplus lines tax. This exemption does not apply to boats or aircraft used solely for personal pleasure, family use, or the transportation of executives, employees, and guests of the insured.
I have passed the Florida surplus lines exam and obtained my license. What do I do next?

The next step is to appoint yourself through your Florida Department of Financial Services MyProfile account at  https://dice.fldfs.com/public/pb_index.aspx.  

According to Florida law, once you obtain a surplus lines license, you are considered a member of the Florida Surplus Lines Service Office and therefore, must register with FSLSO via the Surplus Lines Information Portal (SLIP) at  https://slip.fslso.com.  
What should I do if my business address changes?
FSLSO should be informed within 30 days after a change of principal business or street address, mailing address, or email address so that all necessary reports and correspondence are appropriately directed. All information may be updated through SLIP. 
When is a disclosure form or documented acknowledgement of disclosure required?

Effective January 1, 2022, pursuant to F.S. 626.916 (1)(e), no coverage shall be eligible for export unless the insured has signed or otherwise provided documented acknowledgment of a disclosure in 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. 

This requirement does not apply to wet marine, transportation, or aviation risks subject to F.S. 626.917. To help determine which form is required for each line of coverage, please review the Diligent Effort/Disclosure Matrix.
What elements are reviewed during a Compliance Review?

The following elements will be reviewed during a Compliance Review:

 1. Documentation

    • Surplus lines agent license
    • Agency/agent financial ledgers
    • Diligent Effort forms

 2. Policy Review Data Elements

    • Declarations page
    • Policy number
    • Name of insured
    • Stamp information
    • Transaction type
    • Insurer
    • Coverage code
    • Policy period
    • Premium
    • Policy fees
    • Inspection fees
    • Premium tax
    • Service fee
    • Citizens' assessment fee (if one is in place)
    • EMPA surcharge
    • Florida Hurricane Catastrophe Fund (if one is in place)
    • Unfiled policies/transactions
Can I complete the diligent effort form in place of a signed disclosure?

Execution of a diligent effort search does not take the place of a disclosure statement signed by the named insured on exempt coverages. For coverages that are statutorily exempt from the diligent effort requirement, the retail or producing agent is required to keep a disclosure statement signed by the named insured.

Surplus lines agents are not required to keep a copy of the disclosure form; however, it would be beneficial to keep a copy if needed to resolve any dispute with the insured regarding the placement of the surplus lines coverage. Please note: the surplus lines agent is required to maintain a copy of the disclosure form if they are also acting as the retail/producing agent.
How do I transfer a policy or book of business to a new agent?

In order to complete a transfer of business, you must first decide which type of transfer is applicable (single policy transfer, multiple policy transfer, or global transfer), then complete the Transfer of Business forms including the agents’ signatures and email the completed forms to agent.services@fslso.com.

Single Policy Transfer
When transferring a single policy and associated transactions, the assuming agent and relinquishing agent are required to complete the FSLSO Transfer of Business forms.

A single policy transfer can also be initiated by a Broker of Record (BOR). In order to transfer a single policy initiated by a BOR and its associated transactions to the agent assuming the policy, a completed and signed Assuming Agent Transfer of Business form with a copy of the BOR must be sent to FSLSO. The Relinquishing Agent form is not required to be completed. Upon verification, the transfer will be made. 

Multiple Policy Transfer
When transferring multiple policies and associated transactions, the relinquishing agent and the assuming agent are required to complete and sign the FSLSO Transfer of Business forms and provide a list of the policies to be transferred.

Global Transfer
A global transfer is necessary when the relinquishing agent is no longer employed by the agency or has taken on a different role within the agency. When requesting a global transfer, the relinquishing agent and the assuming agent are required to complete and sign the Transfer of Business forms. For filing purposes, FSLSO will transfer three years of current filings to the assuming agent unless instructed otherwise.
How do I submit a cancellation for a layered policy?
The SLIP system only allows one cancellation transaction to be filed. Thus, when submitting a layered policy cancellation, you must file one cancellation and then file the remaining transactions as return premiums.
Does Florida have regulatory restrictions on what a surplus lines agent may charge as a fee and are the fees considered premium for taxation purposes?

Acceptable fees include a policy fee charged by the filing surplus lines agent, inspection fees, survey fees, membership fees, or similar fees charged in consideration for the insurance contract per F.S. 626.916. These fees are considered premium for taxation purposes. 

With the passage of House Bill 301, effective July 1, 2019, the $35 cap on the policy fee charged by the surplus lines agent was removed. A surplus lines agent may now charge a “reasonable” per-policy fee that still has to be reported to the FSLSO when making policy filings and will remain taxable. This fee must also be itemized separately to the insured before purchase and enumerated in the policy.

Further, a retail agent may charge a “reasonable” per-policy fee for surplus lines policies, which must also be itemized separately to the insured before purchase. The new retail agent fee statute does not explicitly include the fee in the definition of “taxable premium” and is not required to be enumerated on the policy.
How do I submit a layered policy?

When submitting a layered policy, agents and IPC filers need to enter each layer under the insurer that wrote its particular layer of business. If the policy number is the same for each insurer, agents will use the same policy number for the entire risk but will need to break out the appropriate amount of premium allocated to each particular insurer. 

If insurers have submitted different policy numbers for each layer of the policy, agents and IPC filers must submit each policy separately under the appropriate policy number. Remember to pay close attention to the policy number and file it exactly as it appears on the declarations page.
Should I notify FSLSO if I leave my agency?
If you are leaving an agency with active surplus lines files, you must transfer the files to a new broker of record. You will remain responsible for those files until a new agent assumes them. A Transfer of Business Form is available here. You must also update your agency information in SLIP. 
Why did I receive an email from the FSLSO for a premium filing deficiency? I filed more premium than the email represents.

The batch file displays the total amount for all premium submitted in the batch. If your premium is greater than the amount shown on the discrepancy notice, then some of the reported premium did not have an effective date in the reporting period. 

The email you received from the FSLSO compares the insurer’s premium effective dates within the reporting period to agent and IPC filers’ premium within the same reporting period.
Why would policy information not match and reconcile automatically?
Incorrect Premium Amount
The most common errors are discrepancies between premium submitted by the agent/IPC filer and the insurer. Please make sure to submit the premium as it appears on the declarations page of the policy.
 
Incorrect Policy Number
There are a variety of factors that can contribute to an insurer filing not matching with a corresponding agent or IPC filing, attributable to human error when making the submission. As one of the matching criteria is the policy number, the addition of extra characters such as letters, numbers, hyphens, and spaces will lead to an unmatched policy number. One way to avoid this is to make sure that the policy number submitted to FSLSO is the same as the one on the policy’s declarations page. This way, both the insurer and agent/IPC filer are submitting the same policy number.
 
Incorrect Insurer
Relative to the agent and IPC filer, it is common to find that the wrong insurer was selected when making the policy submission. When filing policy information, please be sure to select the insurer shown on the declarations page. If the policy has multiple insurers with premium associated with each, the filing should have the insurers and their portion itemized when making the submission to our office. Since several insurers have similar names, extra care should be taken when submitting the insurer’s name.
 
Incorrect Effective Date & Insured Name
Submitting the incorrect effective date will also create a variance. Be sure to include the exact effective date as listed on the policy or endorsement. The same is also applicable to the insured’s name. When submitting the insured name, you will need to include the entire insured name, as stated on the declarations page, when filing with the FSLSO. Do not submit the “doing business as” (DBA) portion of the name.
Is there a penalty for not providing requested information in a timely manner?

Failure to provide information on time (per F.S. 626.930 (2)) could result in administrative action by the Department of Financial Services (DFS), and possible suspension or revocation of the agent’s license.

Per F.S. 626.930 (2) all records shall at all times be open to examination by the Department of Financial Services or the Florida Surplus Lines Service Office without notice and shall be so kept available and accessible for five years following the expiration or cancellation of the contract.

According to F.S. 626.923, a surplus lines agent shall, within 30 days after the date of a request by the Department or the Florida Surplus Lines Service Office, furnish an exact copy of all requested policies, including applications, certificates, cover notes, or other forms of confirmation of insurance coverage or any substitutions or endorsements. 
Who must sign the disclosure form?
The disclosure form must be signed by the insured or a designee of the insured. Under Florida law, the producing agent is not required to sign the disclosure statement.
How do I terminate my surplus lines license?
To voluntarily terminate/surrender your license, please log in to your Florida Department of Financial Services MyProfile account. You will need to terminate your appointments first; then, you may surrender your license(s).
 
Alternatively, you may send a letter to the Bureau of Licensing stating that you wish to surrender your license. Please include the following:
  • Name
  • Florida License ID Number
  • Mailing address
  • Telephone number
  • Enclose your Florida insurance license ID or a statement indicating that you do not have the ID
  • Signature of the licensee
The letter can be emailed to the Department at AgentLicensing@MyFloridaCFO.com or mailed to:

Florida Department of Financial Services
Division of Agent and Agency Services
Bureau of Licensing
200 East Gaines St.
Tallahassee, FL 32399-0319
 
Email agent.services@fslso.com for more information. 
What is the maximum amount an insurance company can charge for a policy fee?
There is no limit on fees imposed by a surplus lines insurer. Still, the fee charged by the insurer should be charged in consideration for the insurance contract, and the fee should be remitted to the insurer and not retained by the agent or MGA.
Who do I contact if I have additional questions about Premium Reconciliation?
If you have additional questions about Premium Reconciliation, please contact Accounting at 800-562-4496, option 4 or email accounting@fslso.com.
I am a relatively new Florida surplus lines agent and would like to confirm that I am operating in compliance. Do I have to wait three (3) years for a compliance review?
No. You may request a review at any time. We know there are numerous statutes and requirements to keep up with while navigating the surplus lines marketplace, so the FSLSO Compliance Review Department can schedule a complimentary review upon request.
When does the surplus lines agent keep a copy of the disclosure form?
According to Florida law, obtaining and maintaining an accurate and complete surplus lines disclosure is the sole responsibility of the retail/producing agent, not the surplus lines agent. Surplus lines agents are only required to obtain a disclosure when acting in both a producing and surplus lines capacity.