Compliance FAQs

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Who do I contact if I have additional questions about Production Ledger Review?

If you have additional questions regarding Production Ledger Review, please contact: 

Amber Pullen
800-562-4496, ext. 154
apullen@fslso.com 
Do all surplus lines agents receive a Production Ledger Review?
Yes. All licensed and appointed surplus lines agents — resident and non-resident — may be subject to a Production Ledger Review approximately every three years. 
What is the purpose of a Production Ledger Review?
The Production Ledger Review program was developed to supplement the Premium Reconciliation Program, which identifies unreported premium by comparing policy data reported by agents to policy data reported by insurers. Production Ledger Reviews include verifying production ledgers supplied by the agent against the data filed with the FSLSO.
How do I update my user details in SLIP+?

To update your user details in SLIP+, follow these instructions:

  1. Click on the user’s name in the top right of the SLIP+ screen and select Settings from the drop-down.
  2. Select User Manager from the left side menu.
  3. Click the username in the user table.
Make the necessary changes and click Save.
How do I know if the coverage I am placing requires a diligent effort, disclosure, or both?

Refer to our Diligent Effort / Disclosure Matrix for guidance on the diligent effort or disclosure requirement for each line of coverage for both residential and nonresidential placements.
What information should I prepare for a Production Ledger Review?

The Production Ledger should include a complete list of only Non-Admitted (surplus lines)Florida business, written by the surplus lines agent for the time period indicated in the request. The list should not include any admitted policies. The file must be delivered in Excel only and must include the following data elements for each transaction:

  • Policy Number
  • Insured Name
  • Effective Date
  • Insurer
  • Premium
 
What elements are reviewed during a Production Ledger Review?

The following elements will be reviewed during a Production Ledger Review: 

 Policy Data Elements 

  • Policy number 
  • Name of Insured
  • Insurer
  • Premium
  • Effective Date
Who is required to file a quarterly affidavit?

All surplus lines agents who have transacted business must file a quarterly affidavit.

Per F.S. 626.931, all surplus lines agents that have transacted business during a calendar quarter shall, on or before the 45th day following the calendar quarter, file with FSLSO an affidavit on forms prescribed and furnished by FSLSO. The affidavit must state that all surplus lines business transacted by the agent during such calendar quarter has been submitted to FSLSO as required.

The quarterly affidavit can be submitted electronically via the Compliance tab in SLIP+. 

Agents who fail to file an affidavit when due may be subject to a fine by DFS up to $50 per day for each day the neglect continues, beginning the day after the affidavit was due until the date it was received by FSLSO.

AFFIDAVIT FILING SCHEDULE 

1st Quarter January 1 – March 31
Filing Deadline May 15

2nd Quarter April 1 – June 30
Filing Deadline August 14

3rd Quarter July 1 – September 30
Filing Deadline November 14

4th Quarter October 1 – December 31
Filing Deadline February 14
How does the Premium Reconciliation program work?

The Premium Reconciliation program is an inspection of submitted insurer and agent/IPC policy information to find “variances and verify that all taxes, service fees, and assessments have been paid correctly.

Since its inception in 2000, the Premium Reconciliation program has been highly effective in the collection of taxes, fees, and assessments relative to unreported premium. In 2018, more than $70 million in unreported premium was identified, resulting in more than $2.5 million in taxes, fees, assessments, and penalties.

As Florida eligible surplus lines insurers and agents submit policy data to FSLSO, our system automatically "matches" information from both parties on correlating policies. Information is linked based on several factors, including policy number, premium amount, insurer name, and effective date.

As an example, Agent John Doe submits policy information on a Commercial Property policy written through XYZ Insurance Company. XYZ Insurance Company is also required by Florida Statute to file policy information regarding the Commercial Property policy written by Agent John Doe. Both parties submit policy information for the risk and is “matched” and reconciled through FSLSO’s database.
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.
As an agent, do I have to file with FSLSO?
Yes. Once you become a licensed surplus lines agent in Florida, you are deemed a member of FSLSO. You must file all policy information required by law, as stated in the Agent Procedures Manual and FSLSO’s FSLSO’s Plan of Operation adopted under subsection (5).
What is considered premium for the purpose of calculating the premium receipts tax due?

According to Florida law (F.S. 626.932), the term “premium” means the consideration for insurance by whatever name called and includes:

  • Any assessment,
  • Any membership,
  • Policy,
  • Survey,
  • Inspection,
  • Service, or
  • Similar fee or charge

in consideration for an insurance contract, which items are deemed to be a part of the premium.

The per-policy fee charged by the filing surplus lines agent and authorized by F.S. 626.916(4) is also included within the meaning of the term “premium.” 

However, the service fee imposed by F.S. 626.9325 is excluded from the meaning of the term “premium.”
What is a Diligent Effort?

Diligent effort means seeking coverage from and having been rejected by at least three authorized insurers currently writing this type of coverage and documenting these rejections.

The only exception is in the case of a residential structure that has a dwelling replacement cost of $700,000 or more. In this case, you would only need to seek coverage from and be rejected by at least one authorized insurer currently writing the requested coverage and documenting the rejection.

Surplus lines agents must maintain, as part of each insured’s file, a copy of the retail or producing agent’s documentation of a diligent effort search, if applicable. It is the responsibility of the surplus lines agent to verify that the retail or producing agent has made a diligent effort to place the coverage with an authorized insurer. The surplus lines agent must be able to reasonably rely on the efforts made by the retail or producing agent by taking into account such factors as conducting a program to verify the diligent effort process meets the requirements outlined in F.S. 626.916.
How do I obtain a Florida surplus lines license?

Obtaining a Florida surplus lines license is a multi-step process that includes pre-qualification, applying for the license, and an examination. For details on each of these steps, please refer to the  Agent Licensing Requirements page, which will give you step-by-step instructions. 
Are surplus lines insurers required to file a No Business Report?

Yes. A No Business Report is required in lieu of quarterly or annual policy information for eligible surplus lines insurers not doing business in Florida and must be submitted through SLIP+. Foreign insurers must submit the No Business Report quarterly within 90 days of the end of the quarter. Alien insurers need to file annually, by June 30, for the previous calendar year.

 
What happens if there is not a match for the policy information?

There are times when policy information submitted by the insurer does not match with a surplus lines agent or IPC filing. At this point, the Premium Reconciliation staff works to find the appropriate corresponding agent or IPC policy information to match up with the insurer filing.   The Premium Reconciliation staff primarily uses four components to match insurer filings with agent and IPC filings including:

  • Policy number
  • Premium amount
  • Effective date
  • Insurer name

     

If the matching filing cannot be located, staff will contact the insurer to gather additional information, including the name of the agent or agency, contact information, as well as a copy of the declarations page.

Staff will then contact the responsible party to inquire if the matching policy filing was made and request the confirmation number for the policy in question if it was filed. If necessary, the Premium Reconciliation staff may also request that the agent or IPC filer provide additional documentation.

If the policy submission has not been made, the Premium Reconciliation staff will request it be done at the earliest convenience to avoid any late payment penalties that could accrue. The Premium Reconciliation staff has up to 180 days to reconcile the outstanding policy before it is referred to the Department of Financial Services or the Office of Insurance Regulation.
When can I start transacting surplus lines business?

Once you are licensed, appointed, and registered through SLIP+ you may begin transacting business.

For more information on obtaining a license, visit the following web pages:

For more information, send an email to agent.services@fslso.com. 
Do all surplus lines agents receive a Compliance Review?
Yes. All licensed and appointed surplus lines agents — resident and nonresident — may be subject to a compliance review approximately every three years.
Is international/non-U.S. premium taxable?
No. International/non-U.S. premiums do not have to be filed with FSLSO. For more information on this topic, refer to Bulletin 2012-03 regarding filing changes on multistate risks bearing non-U.S. premium.
Where can I purchase the Study Manual for the state surplus lines insurance exam?
FSLSO maintains a contract with the Florida Department of Financial Services to produce and distribute the State's official study guide for the surplus lines licensing exam, titled  Florida Surplus Lines Insurance Study Manual. Visit the Education page to purchase the manual.