Compliance FAQs
The following elements will be reviewed during a Compliance Review:
1. Documentation
- Surplus lines agent license
- Policy Declaration pages
- Endorsements (if requested)
- Policy Face or Front Pages (if applicable)
- Invoices
- Inspection Report (if applicable)
- Membership Agreement (if applicable)
- Documentation to support any fees charged in addition to the surplus lines agent policy fee (if applicable)
2. Policy Review Data Elements
- Declarations page
- Policy number
- Name of insured
- Zip code and county of Risk
- Stamp information
- Transaction type
- Insurer
- Coverage code
- Policy period
- Supplemental residential property data
- 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
The next step is to self-appoint your license 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 SLIP+ at fslso.slipplus.com.An entity should be a governmental (state, county, municipality) entity to be exempt from surplus lines tax. 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 its 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.This error means the brokerage/agency license number used is not a valid licensed surplus lines agency. In most cases, the error occurs because a brokerage number was inserted in a broker section, or a broker number was inserted in a brokerage section.
Please review the policy for a Florida licensed surplus lines agent and cross-reference it with our valid Florida agent listing. If you cannot locate the agent’s license, then please review the valid agency listing.| All premium-bearing transactions, regardless of tax status, must be submitted within 30 days from the effective date of coverage. However, you may submit transactions earlier if you wish. |
To make this easier for you, we developed the Compliance Review Checklist. This list lays out everything we will check for during your review.
For agent filings, the agent shall pay interest on the amount of any delinquent tax due, at the rate of 9% per year, compounded annually, beginning the day the amount becomes delinquent per F.S. 626.936(2). For IPC filings, the tax imposed hereunder, if delinquent, shall bear interest at a rate of 6% per year, compounded annually per F.S. 626.938(5).
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.
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 Transaction Effective Date & Insured Name
Submitting the wrong transaction effective date will also create a variance. Be sure to include the exact transaction effective date as listed on the policy or endorsement. The same is also applicable to the insured’s name. When submitting the insured's 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.
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.
A surplus lines agent may charge a “reasonable” per-policy fee that must be reported to the FSLSO. This fee is taxable and must 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. This fee is not required to be enumerated in the policy and is not included in the definition of "taxable premium" in statute.When submitting a layered policy, agents and IPC filers must enter each layer under the insurer that wrote the 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. However, the appropriate amount of premium allocated to each separate insurer must be broken out.
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 premium allocation outlined in the policy documents.
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 broker of record (BOR) can also initiate a single policy transfer. 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.
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.
