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Broker Filing Procedures

All surplus line insurance for California home state insureds should be filed with the Surplus Line Association of California (SLA), with the exception of special lines ocean marine, aircraft or spacecraft, interstate railroad, and reinsurance of the liability of an admitted insurer. (Refer to CIC Section 1760.5 for additional information.)

 

The documents required to be filed are the declarations page, certificates, cover notes, or binders for all new and renewal policies with corresponding Confidential Report of Placements (SL-1 forms) and Diligent Search Reports (SL-2 forms), endorsements, and cancellations. The SL-2 form is not required if the type of coverage or risk meets the Export list requirements or the insured qualifies under the NRRA definition of an exempt commercial purchaser/commercial insured.  You can download the documents on our website by clicking on the following link: SLA Filing Forms.

The SLA accepts filings from USPS and electronically through the SLIP portal at https://www.slip.slacal.org/.  Policy filings and required forms are not accepted via email, fax, or any other method, unless specifically requested by an SLA employee.

We encourage all filers to file using our Surplus Lines Information Portal (SLIP) electronic filing system. If you are not yet signed up for SLIP, please email support@slacal.org. In your email, please include the license number under which you will be filing.

For information on how to use SLIP, please see SLIP FAQs.


Submissions

Filings should be submitted in groups of no more than 75 transactions, with a cover sheet.  For SLIP entries, the cover sheet is system generated.   If filings exceed 100 items monthly it is recommended submissions should be filed weekly, or at least twice monthly.

The submission cover sheet should include the following information: the assigned SLA broker number, name of the insured, whether the insured is an exempt commercial purchaser (ECP)/commercial insured, transaction type, policy number, premium amount and stamping fee, invoice date*, and percentage of the risk allocable to California for each item in the submission, with a grand total of items being filed. The listing should be in the same order as the documents in the submission.

*The invoice date can be shown on your coversheet, declarations page, or endorsements; or a copy of the invoice can be attached to the policy or endorsement. (Refer to SLA Bulletin #1061.)

Click here for an example of a submission coversheet

The documents within a submission filing should be submitted in the following order: new and renewal policies, endorsements, and cancellation endorsements.   The preferred document order for each new or renewal policy is as follows: the declaration page, cover note or binder, followed by forms or attachments to the policy if any, the SL-1 form, and SL-2 form (when applicable).

The state surplus line tax and stamping fee must be shown separately on the filing document.

For paper documents, all new and renewal policies and endorsements, including all non-money endorsements, for surplus line placement where California is the home state should be filed with the Surplus Line Association of California (SLA). Documents should be mailed to this address:

The Surplus Line Association of California
50 California Street, 18th Floor
San Francisco, California  94111


New Business and Renewals
For all new and renewal policies, the following documentation must be provided within 60 days of placing the insurance with a surplus lines insurer:

Paper filings must include a copy of the declaration page, certificate, cover note or binder, a completed copy of the Confidential Report of Placement (SL-1 form), and a completed copy of the Diligent Search Report (SL-2 form) unless the type of risk or coverage meets the Export List requirements and/or the insured qualifies under the NRRA Exempt Commercial Purchaser/Commercial Insured.  

Electronic filings must include an uploaded copy of the declaration page, certificate, cover note or binder.  Electronic submissions must include an uploaded copy of the completed Confidential Report of Placement (SL-1 form) or completion of the electronic SL-1 form, and an uploaded copy of the completed Diligent Search Report (SL-2 form) or completion of the electronic SL-2 form. (If the risk or type of coverage meets the Export List requirements and/or the insured qualifies under the NRRA definition of an Exempt Commercial Purchaser/Commercial Insured, the SL-2 form is not required.)

 The surplus line broker who signs the SL-1 form must retain the original in his/her file. The agent, broker or surplus line broker who signs the SL-2 form must maintain the original and send copies to all other agents, brokers, or surplus line brokers involved in the transaction. (Refer to SLA Bulletin #831 for additional information.) 

Scanned copies will meet the recordkeeping requirements of Section 2190 to 2190.7 of the California Code of Regulations.  The scanned copies must be a full replica of the document, clearly legible, and in a format that does not allow editing.  (Refer to SLA Bulletin #1127.)



Endorsements and Cancellations

For all endorsements and cancellations, the following documentation must be provided:

Paper filings must include a copy of the addendum or endorsement.

Electronic filings must include an uploaded copy of the addendum or endorsement.


Extensions Endorsements over 90 days in the Aggregate in a 12 Month Period
For all endorsements extending the policy term for more than 90 days in the aggregate in a 12 month period, the following documentation must be provided:

Paper filings must include a copy of the addendum or endorsement, a copy of the completed SL-1 Form, and a copy of the completed SL-2 Form (If the risk or type of coverage meets the Export List requirements and/or the insured meets the NRRA Exempt Commercial Purchaser/Commercial Insured qualifications, the SL-2 form is not required.)

Electronic filings must include an uploaded copy of the addendum or endorsement, an uploaded copy of the completed SL-1 form or completion of the electronic SL-1 form, and an uploaded copy of the completed SL-2 form or completion of the electronic SL-2 form.  (If the risk or type of coverage meets the Export List requirements and/or the insured meets the NRRA Exempt Commercial Purchaser/Commercial Insured qualifications, the SL-2 form is not required.)


Non money or nil endorsements

Non-money or nil endorsements (with the exception of extension endorsements) should be submitted separately with a cover sheet that only states Non-money endorsements.  Each non-money endorsement does not have to be listed on the cover sheet.

Each submission of paper filings received at the SLA is assigned an identifier which consists of the following information: broker’s name, broker’s assigned SLA number, date received, postmark date, submission number, total number of items in the submission and total premium amount to be filed. This information is recorded in our database.

Each submission of electronic filings received through SLIP has a system assigned submission number for the submission page which includes:  broker’s name, broker’s assigned SLA number, date received, date submitted, submission number, total number of items in the submission and total premium submitted.

All filings and forms are reviewed for completeness and accuracy in accordance with the Commissioner’s instructions.

Pertinent policy information is coded and recorded in our database. The filing surplus line broker is notified of any errors, inaccuracies or insurance code violations in the filed documents. This notification process is known as tagging.  If tags are not resolved in a specified amount of time, as outlined in the tagging procedures, it is reported to the Insurance Commissioner.

All documents filed with the SLA, as required by law, are the property of the CDI and will be divulged, or open to inspection, only as authorized by the CDI. The SLA treats all such documents as confidential. The CDI has only authorized the SLA to make such documents available, on request, to the surplus line broker who filed them. The SLA shall not release them to any other person, except statements filed under CIC section 1763 which the Commissioner has determined in writing that the public interest or the welfare of the filing broker necessitates release. Refer to Section I.C. of Plan of Operation for additional details. Insureds and insurer(s) for whom documents were filed may request a copy of these filings by asking the CDI to release them. To request copies, please send your public information request to: California Department of Insurance, Attn: Custodian of Records, 300 Capital Mall 17th Floor, Sacramento, CA 95814. 

Home State
For exposures located in more than one state, the home state for an insured is where the insured maintains its principal place of business (for business entity) or principal place of residence (for an individual).

If none of the insured risk resides in the state where the insured maintains its principal place of business or residence, the home state will then be determined by the state with the greatest allocation of the insured’s taxable premium.

Surplus Lines and Reinsurance Reform Act (NRRA)
Refer to the SLA's NRRA page.

Standard Industrial Classification Codes
In 1996 the SLA began assigning the Standard Industrial Classification (SIC) codes to all new and renewal policies. These codes were originally developed to classify establishments by the type of business they were engaged in. The purpose behind the SLA’s collection of this data was to provide legislators with a more accurate scope of the broad range of businesses that utilize the surplus line market.

The SIC codes are found in the Standard Industrial Classification Manual. This manual classifies a variety of economic activities. The contents are categorized into eleven divisions: agriculture, mining, construction, etc. Each division is subdivided into major groups, with a more detailed description of the activity. For the SLA’s purposes, we only consider the first two digits from the major groups and add two zeros to accommodate the four-digit field in our database. To accommodate personal lines of coverage, which are not included in the manual, four additional codes were created by the SLA. 

Export List
On 1/1/1997 the CDI issued the first official California Export List.  The Export List itemizes the types of insurance coverage or risk for which the Commissioner has determined there is not a reasonable or adequate market among admitted insurers. Types of insurance on the Export List may be placed with approved surplus line insurers without the need for a Diligent Search Report, although surplus line brokers must continue to file a Confidential Report of Placement. Refer to CIC Section 1763.1 for additional information on the Export List.

The CDI holds a public hearing annually on the Export List to hear testimony suggesting an addition or deletion to the Export List.  The SLA sends out a bulletin prior to the hearing notifying members of the date, time, and location.

Lloyd’s Syndicate Placements
For Lloyd’s syndicate placements effective 1/1/97, the surplus line broker is required to identify the syndicates used on all new, renewal policies and extension endorsements. Each policy must identify each syndicate by number along with the respective percentage of participation of the risk. Each Lloyd’s syndicate used on a placement must be listed on the List of Approved Surplus Line Insurers.

Surplus Line Insurer
A "surplus line insurer" is an insurance company or syndicate licensed in at least one state or country but not in California. Also known as a "nonadmitted" insurer. Surplus line insurers domiciled in the United States are called "U.S." insurers and those domiciled in another country are "Non-U.S." insurers.

LASLI Company
A "LASLI company" is a surplus line insurer on the LASLI List. LASLI stands for "List of Approved Surplus Line Insurers," which is a list of surplus lines insurers approved by the Commissioner for placements of surplus line risks by California surplus line brokers.

Eligible Surplus Lines Insurer
An eligible surplus lines insurer is a surplus line insurer that meets eligibility requirements for placements with California home state insureds by surplus line brokers. As provided in California Insurance Code Section 1765.1, to be eligible, a foreign insurer must have $45 million in capital and surplus and be licensed to write the type of insurance in its state of domicile, and an alien insurer must be listed on the IID Quarterly Listing of Alien Insurers maintained by the NAIC.

Ineligible Surplus Lines Insurer
If the California Insurance Commissioner determines that a carrier is not eligible, the Commissioner may issue an order and ask the SLA to notify all surplus line brokers that the carrier is no longer eligible for placement of California home-state insureds' risks.

 (The following section is for information purposes only. It is not necessary to file the Disclosure Statements with the Surplus Line Association.)

D-1 Freestanding Disclosure Statement
The D-1 statement is a freestanding document in 16-point bold type, which must be signed by the insured at the time the producer accepts an application for an insurance policy issued by a surplus lines insurer, other than a renewal of that policy. The agent, broker, or surplus line broker who received the originally signed D-1 statement from the insured must maintain the original in his or her records for a period of at least five years and send copies of the D-1 to all agents, brokers, or surplus line brokers involved in the transaction. Scanned copies will meet the recordkeeping requirements of Sections 2190 to 2190.7 of the California Code of Regulations.  The scanned copies must be a full replica of the document, clearly legible, and in a format that does not allow editing. (Refer to SLA Bulletin #1127.)

D-2 Disclosure Statement
The D-2 statement is a disclosure statement, which contains substantially the same wording as the D-1 statement but does not require a signature by the insured. Every policy issued by a surplus lines insurer and every certificate evidencing the placement of insurance must contain or have affixed on its front by the insurer or surplus line broker this disclosure statement, in 16-point bold type. 

Industrial Insured Exemption
When a contract is issued to an industrial insured, the D-1 statement is not required. The mandatory D-2 statement is still required to be contained or affixed to the policy, certificate or binder, whichever the insured receives first. 

The surplus line broker is responsible to ensure that the applicant is an industrial insured.  An industrial insured is an insured that does both of the following:

1)  Employs at least 25 employees on average during the prior 12 months.

2)  Has aggregate annual premiums for insurance for all risks other than workers' compensation and health coverage totaling no less than twenty-five thousand dollars ($25,000) or obtains insurance through the services of a full-time employee acting as an insurance manager or a continuously retained insurance consultant.  A "continuously retained insurance consultant" does not include:
(i) an agent or broker through whom the insurance is being placed,
(ii) a subagent or subproducer involved in the transaction, or
(iii) an agent or broker that is a business organization employing or contracting with a person mentioned in clauses (i) and (ii).

Commercial Insureds
Placements involving commercial insureds (also referred to as "exempt commercial purchasers") as defined in California Insurance Code Section 1760.1(b) may be made without the need for a Diligent Search Report if 1) the surplus line broker has provided written disclosure to the insured that insurance may or may not be available in the admitted market that may provide greater protection with more regulatory oversight and 2) the commercial insured requests in writing that the insurance be placed with a surplus lines insurer.  A Confidential Report of Placement is required for a commercial insured placement. 

To determine whether the insured meets the NRRA definition of an Exempt Commercial Purchaser, please review the following checklist. If the insured meets all three requirements, a diligent search does not need to be performed.

Requirement 1: Employs or retains a qualified risk manager (refer to definition below)

Requirement 2: Paid an aggregate nationwide property & casualty premium of at least $100,000 in the immediately preceding 12 months.

Requirement 3: Meets one of the following:
• Possesses a net worth in excess of $20 million, or
• Generates annual revenues over $50 million, or
• Employs more than 500 full time employees per individual insured, or is a member of
• an affiliated group employing more than 1,000 employees in the aggregate, or
• Is a non-profit or public entity generating annual budget over $30 million, or
• Is a municipality with a population in excess of 50,000 persons.

NRRA Qualified Risk Manager Definition
Under the NRRA, a Qualified Risk Manager must meet all three of the following requirements:

Requirement 1: Must be an employee of, or a third party consultant retained by, a commercial policyholder, and

Requirement 2: Provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance, and

Requirement 3: A bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management; and three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance, or holds one of the designations below:

CPCU or ARM or CRM or RF or any other designation, certification, of license determined by a State Insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management, or

Has seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and any one of the following designations: CPCU or ARM or CRM or RF or any other designation, certification, or license determined by a State insurance commissioner or other State insurance regulatory official or entity to demonstrate minimum competence in risk management, or

Has at least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance, or

Has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management.