Statement of Diligent Effort
FSLSO provides this downloadable diligent effort form as a sample for surplus lines agents. Per F.S. 626.916, no insurance coverage is eligible for export unless it meets certain conditions. It is the responsibility of the Surplus Lines agent to verify that a diligent effort has been made by requiring a properly documented statement of diligent effort from the retail or producing agent. FSLSO provides this downloadable diligent effort form as a sample for surplus lines agents.
A diligent effort search is required for all lines of coverage eligible for export under F.S. 626.916 that are not exempt under F.S. 627.062(3)(d)1 or related to indemnity of deductibles for property insurance. This requirement also does not apply to wet marine, transportation, or aviation risks subject to F.S. 626.917.
Guidance for Completing the Diligent Effort Form
These guidelines serve to assist in the proper completion of the form. Diligent Effort forms are examined during surplus lines agent compliance reviews; therefore, we suggest both retail agents and surplus lines agents keep this information on file.
Completing a diligent search and providing a properly documented Statement of Diligent Effort is one of the conditions that must be met in order for the insurance coverage to be eligible for export.
Retail Agent Responsibilities
- Conduct a diligent effort search.
- Contact three admitted insurance companies unless coverage is for a residential structure with a replacement cost of $700,000 or more, in which case only one declination is required.
- Document admitted market coverage declinations.
- Declinations should be obtained from only insurance companies currently approved in Florida to write the type of coverage being sought. For example, a personal lines quote should not be requested from a company writing only commercial risks to secure a declination.
- Only admitted insurance companies should be listed on the form, not wholesale brokerages.
- The specific reason for the declination should be provided in as much detail as possible.
- The date the declination is obtained should be on or before the effective date of the policy and recorded on the form.
- Declinations typically should not be obtained more than 60 days before the effective date of the coverage being sought.
- The full name and contact information of the person with the insurance company providing the declination should be recorded on the form.
- In the event of an online declination, provide a copy of the online declination to the surplus lines agent.
- Complete and sign the Statement of Diligent Effort form.
- Ensure all fields on the form are complete and legible.
- Forward a copy of the Statement of Diligent Effort form to the surplus lines agent.
Surplus Lines Agent Responsibilities
- Request a copy of the Statement of Diligent Effort and supporting documentation from the retail agent.
- Verify all information on the form is complete and accurate.
- In the event of an online declination, request a copy of the online declination from the retail/producing agent.
- Maintain a copy of the form in business files.
- Have a documented program for verifying diligent effort forms.
Surplus lines agents must verify that a diligent effort has been made by requiring a properly documented statement of diligent effort from the retail or producing agent. However, to comply with the diligent effort requirement, the surplus lines agent’s reliance must be reasonable under the particular circumstances surrounding the export of that specific risk. Reasonableness shall be assessed by considering factors including, but not limited to, a regularly conducted program of verification of the information provided by the retail or producing agent. Declinations must be documented on a risk-by-risk basis.