Compliance FAQs

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• Florida License ID Number
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Q: If the total dwelling replacement cost of residential structures insured by one policy totals $700,000 or more, but not one individual structure has a dwelling replacement cost of $700,000 or more, would the exemption requiring only one declination apply?  (For example, if there were three separate condominium structures, each with a dwelling replacement cost of $400,000 covered under one policy for a total of $1.2 million.)

A: No. The exemption requiring only one declination will not apply if no single residential structure has a dwelling replacement cost of $700,000 or more. Even though one policy will be issued to cover all the buildings included in a single condominium association, an agent cannot use the aggregate replacement cost value of the buildings to reach the threshold. The language in the statute specifically refers to "the residential structure." The agent will only need one declination if any residential structure has a dwelling replacement cost of $700,000 or more, but the qualifying structure must be "residential." It must have dwelling units and cannot be solely a pool, commercial unit, or other common area.

Q: Does the one declination exemption apply if an individual coverage such as liability was written on a residential structure with a dwelling replacement cost of $700,000 or more?

 A: Yes. So long as the residential structure has a replacement cost of $700,000 or more, any coverage requiring a diligent effort would need only one declination. Section 626.914(4), Florida Statutes, does not limit the type of coverage sought to a property policy. It states explicitly: "diligent effort means seeking coverage from and having been rejected by at least one authorized insurer currently writing this type of coverage and documenting this rejection."

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 the 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.

Yes. Florida Statute requires entities engaging in any activity or employing individuals to engage in any activity which by law may be performed only by a licensed insurance agent to hold an agency license.

NOTE: An insurance agency owned and operated by a single licensed agent conducting business in their name and not employing or otherwise using the services of or appointing other licensees is exempt from the agency licensing requirement.

A Transaction in Question, or TIQ, is a transaction that has been received by FSLSO but does not meet one or more of FSLSO’s business rules, has not yet been accepted, and possibly has not been invoiced. If you receive a confirmation number that begins with a “Q,” please make the necessary corrections to the transaction or contact FSLSO if you need assistance. 

When professions require E&O coverage, many products include E&O in a package commonly referred to as a “professional liability” policy. On October 1, 2011, the Office of Insurance Regulation stated that professional liability could be considered E&O insurance. Thus, only a disclosure form is necessary when purchasing professional liability coverage.

A Desk Review is a compliance review conducted by the Compliance Review analyst from their office. Information can be exchanged between the analyst and the agent through SLIP+, phone, email, or postal service. This type of review is better suited for Basic Reviews of agents with a limited number of policies to examine.

Applicable coverage codes: 

• 1000 Commercial Property
• 1001 Builders Risk - Commercial
• 1003 Apartments - Commercial
• 1005 Commercial Package
• 1006 Condominium - Commercial
• 1017 Collateral Protection (force placed coverage)
• 2000 Homeowners-HO-1
• 2001 Homeowners-HO-2
• 2002 Homeowners-HO-3
• 2003 Homeowners-HO-4 - Tenant
• 2004 Homeowners-HO-5
• 2005 Homeowners-HO-6 - Condo Unit Owners
• 2006 Homeowners-HO-8
• 2007 Builders Risk - Residential
• 2009 Dwelling Property
• 2010 Farmowners Multi-Peril
• 2011 Mobile Homeowners

State and governmental entities are NOT exempt and therefore are also assessable.

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.

Florida law (F.S. 626.922 and 626.924) mandates specific information to be included on a surplus lines contract. FSLSO provides a Sample Face Page that contains all the required information.

All new and renewal policies effective prior to July 1, 2020, and any subsequent endorsements on those policies will still be taxed at the original rate of 5%.

For example, the tax rate for a policy, effective January 1, 2020, is 5% of the gross premium. An additional premium endorsement effective July 1, 2020 would also be taxed at 5%. If the policy is cancelled effective August 1, 2020, the tax credit is 5% of the returned premium.