Compliance Review

What is the purpose of a Compliance Review?
The purpose of a Compliance Review is to ensure that surplus lines agents are in compliance with the statutory requirements relative to the sale of surplus lines insurance contracts. The review also measures the quality of service provided in the surplus lines marketplace and provides educational assistance to surplus lines agents when necessary.
Do all surplus lines agents receive a Compliance Review?
All licensed and appointed surplus lines agents — resident and nonresident — may be subject to a compliance review approximately every three years.
What information should I prepare prior to a Compliance Review?
During a Compliance Review, FSLSO will randomly sample policies filed by the agent to review. You will receive a list of the selected policies prior to the review. The supporting documentation for the selected policies should be uploaded in SLIP on the Document Requests page for the Compliance Review Analyst to view.

To make this easier for you, we developed the Compliance Review Checklist. This list lays out everything we will check for during your review.
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
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. 

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.
What is a Basic Review?

A Basic Review is a review of an agent who is currently writing or has written surplus lines business within the last three years. 

The review verifies the status of the agent’s surplus lines license and proper reporting of surplus lines policies. FSLSO will review randomly selected policies to ensure compliance is maintained under the Florida Surplus Lines Service Office Agent Procedures Manual.

What is a Target Review?
A Target Review is a compliance review conducted outside of the usual 30-42-month review cycle, targeting a specific compliance issue.
What is the difference between a Desk Review and an On-Site Review?

A desk review is a compliance review conducted by the Compliance Review analyst from their office. Information can be transferred between the analyst and the agent via phone, email, fax, or postal service. This type of review is better suited for Basic Reviews of agents with minimal policies to review.

An on-site review is a compliance review conducted in the agent’s office.

Is the surplus lines agent required to be present for an on-site review?
No, the surplus lines agent is not required to be present. However, we do ask that an agent representative be available should questions arise during the review process.
Who do I contact if I have additional questions about compliance review?

If you have additional questions regarding compliance review, please contact:

Kristen Gray
800-562-4496, ext. 110