Compliance FAQs

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My batch file has been rejected and the error message indicates “duplicate transaction”. What does this mean?
“Duplicate Transaction” means our system has already received a transaction with the same policy number, effective date, and premium amount. If you receive this error, remove the transaction(s) from the batch file and resubmit.
How often do I renew my self-appointment?
Surplus lines self-appointments must be renewed every two years by the end of the agent's birth month. It is the responsibility of the surplus lines agent to make sure the self-appointment is renewed. Transacting surplus lines business without being properly licensed and appointed is prohibited. To renew your appointment, visit the Department of Financial Services' MyProfile web portal. 
When is a Diligent Effort required?

All personal lines coverages require a diligent effort and a Surplus Lines Disclosure Form.  Most commercial coverages no longer require a diligent effort but require the Surplus Lines Disclosure Form instead.  Wet marine, aviation, and transportation risks are exempt from both. To determine if a diligent effort is required, please review the Diligent Effort/Disclosure Matrix.

For more information, send an email to agent.services@fslso.com. 
Can I complete the diligent effort form in place of a signed disclosure?

No. 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.  
What elements are reviewed during a Compliance Review?

The following elements will be reviewed during a Compliance Review:

 1. Documentation

    • Surplus lines agent license
    • Policy Declaration pages
    • Diligent Effort forms
    • 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
When is a disclosure form or documented acknowledgment of disclosure required?

Effective January 1, 2022, per 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 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. 

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 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+. 
I passed the Florida surplus lines exam and obtained my license. What do I do next?

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.
What entities are considered exempt from surplus lines tax?

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.
My batch file has been rejected and the error message indicates “invalid brokerage” or “invalid broker”.

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.
What happens when a filer neglects to file policy information?
When the Premium Reconciliation staff locates unreported agent or IPC filings, penalties may be assessed on policies subject to taxes, fees, or assessments. Penalties are assessed beginning the date the taxes, fees, and/or assessments should have been filed, invoiced, and payments due.
 
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).
When should transactions be submitted to FSLSO?
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.
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.
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.
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 premium amount for all transactions submitted within the batch. If your total premium exceeds the amount shown on the discrepancy notice, some reported premiums may not have effective dates within the reporting period. The email you received from FSLSO compares the insurer's premiums with effective dates within the reporting period against agent and IPC filers' premiums within the same period.

How do I submit a layered policy?

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.

 
Should I notify FSLSO if I leave my agency?
If you are leaving an agency with active surplus lines policies, you must transfer the policies to a new broker of record. A Transfer of Business Form is available here. You must also update your agency information in SLIP+. 
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 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.
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. 
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.

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.