Agent Procedures Manual

Welcome


In 1997, the Florida Legislature established the Florida Surplus Lines Service Office (FSLSO) as a self-regulating, non-profit association of which all Florida licensed surplus lines agents are recognized as members.

FSLSO maintains a procedures manual in order to provide guidance for agents. This procedures manual is intended to be a working document, and FSLSO updates a new version as information changes. 


Introduction

 

Mission

Facilitate compliance.

Vision
Lead and serve through innovative solutions.
Values

Efficiency – A productive use of resources that provides the ability to do something well or achieve desired results without wasted energy.

Effectiveness – Achieving the desired or intended result which also produces a favorable and successful impression on people.

Goals
  • Protect the revenues of this state
  • Protect consumers seeking insurance in this state
  • Provide a source of advice and counsel for the benefit of consumers
  • Promote and permit orderly access to surplus lines insurance in this state
  • Permit surplus lines insurance to be placed with eligible surplus lines insurers
  • Enhance the number and types of insurance products available to consumers in this state
  • Provide a source of advice to government agencies concerning the operation of the surplus lines insurance market
  • Provide a source of advice and counsel for the benefit of insurers and surplus lines agents in their compliance with the Florida Insurance Code
General

Each Florida licensed surplus lines agent is required by law to report information for insurance policies or documents with FSLSO as provided in the FSLSO Plan of Operation.

FSLSO maintains records of policy information reported and provides to each surplus lines agent a report of business submitted.

This manual is designed to assist agents in filing this information with FSLSO, as well as complying with the Florida Statutes.

Membership Requirements

Any individual, licensed as a surplus lines agent under F.S. 626.927 and 626.9272, shall be deemed a member of the Florida Surplus Lines Service Office (FSLSO). Each newly licensed and appointed surplus lines agent must register through FSLSO’s Surplus Lines Information Portal (SLIP) prior to submitting policy information pursuant to F.S. 626.921. Membership with FSLSO does not in any way affect an agent’s obligation to comply with the surplus lines law and other Florida insurance regulations.


Licensing Requirements

Qualifying Appointments & Licenses
Residents: A requirement of maintaining a surplus lines license is also holding a qualifying license and appointment. According to F.S. 626.927 the surplus lines agent must be a licensed and appointed general lines agent. It is very important to maintain both the qualifying license and appointment with an authorized insurer. Failure to adhere to these requirements could cause an agent’s surplus lines license or appointment to be cancelled.

Non‐Residents: A requirement of maintaining a surplus lines license for a non-resident is to maintain a resident general lines and surplus lines license in the agent’s home state. Non-residents must also adhere to the qualifying license and appointment requirements for their Florida non- resident general lines and surplus lines license. Failure to maintain a resident general lines or surplus lines license along with any Florida non-resident general lines license and appointment(s) from an authorized insurer could cause the non-resident surplus lines license or appointment to be cancelled.

Active Military or Veterans: Pre-licensure coursework is not required for an applicant who is a member or veteran of the United States Armed Forces or the spouse of such a member or veteran pursuant to F.S.626.927(6).
Surplus Lines License Self-Appointment
All surplus lines agents are required to self-appoint their license prior to placing business. The surplus lines self-appointment expires every two years at the end of the agent’s birth month. It is the agent’s responsibility to make certain their self-appointment is renewed. Agents are prohibited from transacting surplus lines business without being properly licensed and appointed. To self-appoint, go to the Department of Financial Services (DFS) website and click on MyProfile. Once logged in, click on Access eAppoint website and follow the instructions.
Continuing Education Requirements
Florida resident surplus lines agents are required to complete statutorily prescribed hours of continuing education courses that have been approved by DFS every two years. Failure to do so could result in the cancellation of the agent’s appointment(s).
Address Change
FSLSO must be informed within thirty (30) days if there is a change in address or other contact information so that all necessary reports and correspondence can be directed properly. An agent may update this information through SLIP or through XML Batch File Submission. Notifying FSLSO does not replace an agent’s obligation to also notify DFS within thirty (30) days of a change of address or other contact information. Agents may update their addresses through their DFS MyProfile account.

Failure to report to FSLSO within thirty (30) days after a change of principal business street address, mailing address or email address could result in referral to DFS.
License Termination
If an agent determines they will not be renewing their surplus lines appointment or wishes to surrender their surplus lines license, the agent must notify FSLSO and the DFS Division of Insurance Agent and Agency Services, Bureau of Licensing in writing. Notifying FSLSO does not replace the agent’s obligation to notify the DFS of their intentions to non‐renew or surrender their surplus lines license. When notifying the DFS of a voluntary surrender of the agent's license, the agent may either: 

  1. Log in to their DFS MyProfile account and click on “Cancel License(s)” or to cancel an appointment, click on “Cancel Appointments”; or, 
  2. Alternatively, you may send a letter to the Bureau of Licensing stating that you wish to surrender your license. Please include the following:
  • Name
  • Florida license ID number
  • Mailing address
  • Telephone number
  • Enclose your Florida insurance license ID or statement indicating that you do not have the ID
  • Signature of the licensee

The letter can be emailed to DFS at: AgentLicensing@MyFloridaCFO.com

Insurance Agency Licensing
Any business location at which an individual, firm, partnership, corporation, association or other entity engages in any activity or employs individuals to engage in any activity, which by law may be performed only by a licensed insurance agent must be properly licensed with DFS.

However, an insurance agency that is owned and operated by a single licensed agent conducting business in his or her individual name and not employing or otherwise using the services of or appointing other licensees shall be exempt from the agency licensing requirements.

Agency licenses are perpetual as long as there is an agent-­in‐charge effectively designated. An agency license will expire after ninety (90) days without a designated agent-­in‐charge.

Visit the Department of Financial Services’ website for more information.

Administrative Duties

30-Day Filing Requirement
Agents are required to file policy information within thirty (30) days from the effective date of the policy transaction on all premium bearing transactions. Agents who are habitual late offenders may be referred to the DFS for appropriate administrative action and assessed a late filing penalty.

Unreported premium bearing transactions identified by FSLSO staff will be assessed interest penalties at the prescribed rates, compounded annually, in accordance with F.S. 626.932(2)(b) and 626.9325(2)(b). Agents who fail to pay taxes and fees required when due, may be fined up to $500 per day for each day the failure continues until payment is received by FSLSO as provided for in F.S. 626.936.
Filing Procedures

F.S. 626.921(2) provides that “All surplus lines agents shall as a condition of holding a surplus lines license in this state, report to and file with the Service Office a copy of, or information on all surplus lines policies or documents as provided in section (7) (B) of the Plan of Operation.

There are two methods to report and file with FSLSO: SLIP or XML Batch. FSLSO’s SLIP provides a web-based platform for Florida licensed surplus lines agents to electronically submit policy information to FSLSO. Additionally, SLIP provides users the ability to not only view previously submitted data, but to also edit policy information, back out transaction data, generate reports and pay invoices. For more information on SLIP view the SLIP Help Reference Guide located on the SLIP Help page in SLIP. The second option, XML Batch, provides a mechanism for an agent to submit large volumes of transaction data from their internal management system seamlessly to FSLSO. Find out more view Batch Filing Business Rules or contact Tech Support.

Data Submission: All premium bearing policy transactions placed with a surplus lines insurer, taxable or non-taxable, must be electronically submitted to FSLSO via SLIP or in the prescribed electronic format for XML Batch File Submissions within thirty (30) days from the effective date of the policy transaction.

Each submission to FSLSO shall contain the following information for each transaction:

  • Surplus lines agent’s name and license number
  • Surplus lines agent’s agency name and license number
  • Name of the insured
  • Policy number
  • Named Insurer(s) and the National Association of Insurance Commissioners (NAIC) number for the insurer(s) participating on the risks
  • The zip code of the primary risk (must be a valid Florida zip code)
  • Billing contact
  • County location of primary risk (must be a valid Florida county)
  • Supplemental homeowner’s data for certain residential coverages
  • Coverage code
  • Transaction types, which include:

1 = new business
2 = additional premium
3 = return premium
4 = cancellation
5 = renewal
6 = reinstatement

  • Effective date and expiration date (of the transaction)
  • Gross premium charged or returned (excluding service fees, taxes and assessments)  

Please note, if Florida is deemed the home state of a multistate risk, the allocated premium for the other state’s (or states’) exposure must be filed. For a tax estimate of a multistate risk please visit our Tax Estimator.

  • Policy fee (this field should only list the surplus lines agent policy fee if one was charged)

0 = taxable
1 = non-taxable commercial aviation
2 = non-taxable governmental, state, county or municipalities
3 = non-taxable wet marine (commercial ocean marine) and transportation risks (motor truck cargo)
4 = non-taxable entities exempt from tax and service fee
5 = non-taxable entities exempt from tax, service fee, and Emergency Management Preparedness and Assistance (EMPA) surcharge

Download Tax Status Codes


Extending Policy Over 364 Days From Expiration: If a policy is extended over 364 days from the original expiration date and all original terms and conditions remain, it must be filed as a renewal in our system to ensure the insured is getting charged the current tax, fee, and assessment rates. An endorsement may still be issued to the insured but a renewal must be filed in our system. For example, you have a policy with an original policy period from 1/1/2017-1/1/2018. If you had an endorsement issued that extended the expiration date to 1/1/2019, then you would need to file a renewal transaction instead of an additional premium transaction in SLIP. If the endorsement is for an extended reporting period (tail) endorsement, the endorsement may be filed as an additional premium transaction, and you do not need to extend the expiration date for the policy in SLIP for these types of endorsements.

Reporting Multiyear Policies: If a policy is paid in annual installments a renewal must be filed in our system on an annual basis. If a policy is perpetual and doesn’t have an expiration date a renewal must be filed on the one-year anniversary, annually, as premium is received.
Accounting & Invoicing Deadlines

View our Accounting Reference Guide

Billing Procedures: Service fees, taxes, assessments and surcharges are invoiced quarterly on the first business day of January, April, July and October.

Invoices: On the first business day of each quarter (January, April, July and October), the Florida Surplus Lines Service Office invoices for taxes, fees, assessments and surcharges based on submissions made during the previous quarter. Invoices will be made available in your SLIP Inbox along with the corresponding billing report(s) after each billing cycle.

Payments: All payments must be received on or before the 45th day following the end of the quarter and shall include all amounts shown as due.

  • 4th quarter invoices issued in January are due by February 14th
  • 1st quarter invoices issued in April are due by May 15th
  • 2nd quarter invoices issued in July are due by August 14th
  • 3rd quarter invoices issued in October are due by November 14th

Electronic Payments: All service fees, taxes, assessments and surcharges can be paid electronically via SLIP. On the SLIP Homepage, choose Pay Invoices from the Invoicing tab on the menu bar. Through this secured website, an agent can save their bank account information for future use as well as enter multiple bank accounts. FSLSO does not charge fees to make online payments via SLIP. However, the agent’s bank may charge a fee for processing Automated Clearing House (ACH) transactions, so the agent will need to verify with their bank.

Please note that if the agent has fraud service on their bank account, they will need to provide their bank with the following ACH Company IDs prior to submitting payment(s):

Florida Surplus Lines Service Office
ACH Company ID: 1593501857
ACH Company Name: FSLSO

Our office collects on behalf of other entities. The ACH Company IDs for those entities are listed below:

Florida Division of Emergency Management
ACH Company ID: 5593467874
ACH Company Name: FSLSO

Florida Department of Financial Services
ACH Company ID: 5522050131
ACH Company Name: FSLSO

Check Payments: Service fees, taxes and assessments are separate charges and must be paid with separate checks.

  • Florida DFS taxes should be made payable to Florida Department of Financial Services.
  • FSLSO service fees should be made payable to Florida Surplus Lines Service Office.
  • Florida Division of Emergency Management (DEM) EMPA surcharges should be made payable to Florida Division of Emergency Management.


Please mail payments to:

FSLSO
P.O. Box 946593
Atlanta, GA 30394-6593

Overnight Address:

Wells Fargo Lockbox Services - #864593
FSLSO
3585 Atlanta Avenue
Hapeville, GA 303545

Agents shall pay interest on any delinquent balances due, at the rates listed below compounded annually; beginning the day the amount becomes delinquent. Agents who fail to pay taxes and fees required when due, may be fined up to $500 per day for each day the failure continues until payment is received by FSLSO as provided for in F.S. 626.936.

  • DFS Tax 9%
  • Service Fee 9%
  • EMPA Surcharge 9%


FSLSO’s policy is that service fee balances less than $10 are not considered delinquent. However, the balances may not remain outstanding for a period greater than one year.

Unpaid service fees due by a surplus lines agent, shall be recoverable in a suit brought by DFS against the surplus lines agent. DFS may authorize FSLSO to file suit on its behalf.

Return of Taxes, Fees and Assessments: If an agent receives a tax, fee and/or assessment invoice with a credit balance, they can either let the credit roll forward and offset future like invoices, or request a refund.

Compliance Review Program

The Compliance Review program was developed to help ensure fairness and conformity with the Florida surplus lines law by monitoring and evaluating data submissions. Compliance reviews are generally completed on resident and non-resident Florida surplus lines agents at least once every three (3) years. Reviews include a basic verification of information such as the policy premium, tax, fee and assessment calculations, statutorily required disclaimers, diligent effort forms, etc.

The purpose of the review is to ensure compliance by the surplus lines agents relative to the export of surplus lines insurance contracts, to provide educational assistance to surplus lines agents where needed and to measure the quality of service provided in the marketplace.

A notice of intent to review records is forwarded to each agent via email, as advance notice of an impending review. Within 5-7 days of notification of intent to review, the agent is contacted to schedule the review date. Once a review date is established, an analyst forwards a detailed list of surplus lines policies selected for review. The review is designed to verify information that the surplus lines agent is responsible for reporting to FSLSO, as well as other information required to be maintained in order to comply with the surplus lines law.

In order for the compliance review analyst to perform their duties on-site, a desk/table, chair, telephone and power outlet are necessary. It is the surplus lines agents' responsibility to make specific records available for the review. The requested records must be available when the review commences. As requested, but not limited to, the compliance review will include a review of the following items made available by the surplus lines agent: surplus lines agent or agency production ledgers for a specified number of years in an electronic spreadsheet format (Microsoft Excel®); policy records relating to policies from a specified number of years (policy declarations, invoices to policyholders, inspections, diligent effort forms, etc.).

FSLSO may review all, but not limited to, the information filed with the office as part of the compliance review process.

Within thirty (30) days of the review, the surplus lines agent will receive a final report from FSLSO. The surplus lines agent may be required to submit, within thirty (30) days of receipt of the final report, a response/corrective action plan to address any non-compliance issues noted in the final report.

Premium Reconciliation Program
The Premium Reconciliation program was created to help ensure that all taxes and revenues have been submitted in accordance with Florida Statute. The process compares data submitted by surplus lines agents and independently procured coverage (IPC) filers with the data being submitted by surplus lines insurers. View quarterly premium reconciliation activity.

As surplus lines insurers make policy information submissions to FSLSO, the information is automatically matched through our datacenter with its correlating policy information submitted by Florida surplus lines agents or IPC filers regarding the same policy. Information is linked based on a number of factors including policy number, premium amount, insurer name and effective date. This reconciliation helps uncover variances in reported information and verifies that all taxes, service fees and assessments have been paid correctly.
Production Ledger Review Program
The Production Ledger Review program was developed to supplement the Premium Reconciliation Program which is used to identify unreported premium by comparing agent and insurer policy data reported. Production ledger reviews include a verification of production ledgers supplied by the agent against the data filed with the FSLSO. The Production ledger reviews are generally completed on resident and non-resident Florida surplus lines agents at least once every three (3) years.

A request for a production ledger review is forwarded to each agent via email, requesting the agency production ledger be provided in an electronic format acceptable by the FSLSO within three weeks of the notice. The review is designed to verify information that the surplus lines agent is responsible for reporting to FSLSO. It is the surplus lines agents' responsibility to make specific records available for the review.
Transfer of Business

It is the surplus lines agent’s responsibility to complete the prescribed form when transferring business upon termination of employment with an agency or for any other reason.

Transfer of Business Instructions & Forms

Catastrophe Contact Information
In the event of a catastrophe in Florida, all agents, resident or non-resident that have placed insurance in Florida within the last 12 months, are asked to complete a Catastrophe Information form located under the Reports tab in SLIP and update this form annually. The information provided on this form will allow FSLSO and DFS the opportunity to better assist our insureds should a catastrophe occur.

Compliance Guidelines

Diligent Effort

Per F.S.626.914 (4) "Diligent effort" means seeking coverage from and having been rejected by at least three authorized insurers currently writing this type of coverage and documenting these rejections. However, if the residential structure has a dwelling replacement cost of $700,000 or more, the term means seeking coverage from and having been rejected by at least one authorized insurer currently writing this type of coverage and documenting this rejection.

Each surplus lines agent shall maintain, as part of each insured’s file, a copy of the producing agent’s documentation of  diligent effort. It is the responsibility of the surplus lines agent to verify that the producing agent has made a diligent effort to place the coverage with an authorized insurer. The agent’s reliance must be reasonable by taking into account factors such as a regularly conducted program to verify the diligent effort process meets the requirements set forth in F.S. 626.916.

Download Diligent Effort Form

Guidance for Completing the Statement of Diligent Effort

These guidelines serve to assist in the proper completion of the Diligent Effort form. Diligent Effort forms are examined during your compliance review; therefore, we suggest you share this with the retail/producing agent from whom you are accepting business.

Per F.S. 626.916, no insurance coverage is eligible for export unless it meets certain conditions. Completing a diligent search and providing a properly documented Statement of Diligent Effort is one of those conditions.

  • It is the responsibility of the retail/producing agent to conduct the diligent search and to complete and sign the Diligent Effort form.
  • The surplus lines agent should obtain the form from the retail/producing agent and maintain it in their files.
  • Declinations should be obtained from only insurance companies currently approved in Florida to write the type of coverage initially 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.
  • All the fields on the form should be completed and should be legible.
  • The full name and contact information of the person providing the declination should be recorded on the form.
  • In the event of an online declination, the surplus lines agent should request a copy of the online declination from the retail/producing agent.
  • 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 retail/producing agent conducting the diligent search should sign and date the form when it is completed.
  • The form should list three admitted insurance companies unless the residential structure has a replacement cost of $700,000 or more, in which case you are only required to have one declination from an admitted insurance company.

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.

Exempt Coverages

Certain lines of coverage are now exempt from the diligent effort search requirement. Agents are no longer required to complete a Diligent Effort form prior to the exportation of the risk for the following commercial lines coverages:

  • Excess or Umbrella
  • Surety and Fidelity
  • Boiler and Machinery and Leakage and Fire Extinguishing Equipment
  • Errors and Omissions
  • Directors and Officers, Employment Practices, Fiduciary Liability and Management Liability
    Intellectual Property and Patent Infringement Liability
  • Advertising Injury and Internet Liability Insurance
  • Property risks rated under a highly protected risks rating plan
  • General Liability
  • Nonresidential Property (except for collateral protection insurance as defined in F.S. 624.6085)
  • Nonresidential Multiperil
  • Excess Property
  • Burglary and Theft
  • Medical Malpractice for a facility that is not a hospital licensed under Chapter 395, a nursing home licensed under part II of Chapter 400, or an assisted living facility licensed under part I of Chapter 429
  • Medical Malpractice for a health care practitioner who is not a dentist licensed under Chapter 466, a physician licensed under Chapter 458, an osteopathic physician licensed under Chapter 459, a chiropractic physician licensed under Chapter 460, a podiatric physician licensed under Chapter 461, a pharmacist licensed under Chapter 465, or a pharmacy technician registered under Chapter 465
  • Effective July 1, 2016, travel insurance, if issued as a master group policy with a situs in another state where each certificate holder pays less than $30 in premium for each covered trip and where the insurer has written less than $1 million in annual written premiums in the travel insurance product in this state during the most recent calendar year
  • Effective July 1, 2021, Deductible Buyback-Property, a code for coverage that provides for the indemnification of deductibles incurred due to a covered property loss
  • Effective July 1, 2021, Personal Lines Flood and Excess Personal Lines Flood no longer require a diligent effort search. Refer to our  Flood Matrix for more information

Many lines of coverage remain subject to the diligent effort requirement and include, but are not limited to, residential property, residential multiperil and commercial residential. Refer to our Diligent Effort/Disclosure Matrix for a concise view of the coverage categories.

Download Surplus Lines Disclosure Form

Disclosure Form/Acknowledgement of Disclosure

Effective January 1, 2022, pursuant to 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 that are subject to F.S. 626.917.

We provide a disclosure form that must be signed by the insured to satisfy this statutory requirement. It is the responsibility of the retail/producing agent to secure and maintain the completed disclosure form.

Diligent Effort / Disclosure Matrix
The Diligent Effort / Disclosure Matrix was developed by the Florida Surplus Lines Service Office for the purpose of providing guidance on the diligent effort or disclosure requirement for each line of coverage, for both residential and nonresidential placements. Surplus lines agents should use the matrix as a reference tool for assistance with the diligent effort and disclosure laws pertaining to Florida surplus lines placements. The information provided should not be interpreted or used as a legal opinion, nor does it supersede directives provided by state or other governing authorities. The Florida Surplus Lines Service Office does not provide legal or tax advice. Whenever agents, brokers, companies, or policyholders have specific questions pertaining to business practices, tax implications or statutory interpretation, we urge the respective parties to seek the counsel of a competent attorney or tax consultant licensed in the appropriate jurisdiction and area of expertise.

Download Diligent Effort / Disclosure Matrix
Affidavit
Per F.S. 626.931, each surplus lines agent who has transacted business during a calendar quarter shall on or before the 45th day following the calendar quarter file with FSLSO an affidavit, on forms as prescribed and furnished by FSLSO, stating that all surplus lines business transacted by him or her during such calendar quarter has been submitted to FSLSO as required. The quarterly affidavit can be submitted electronically via the Reports tab in SLIP.

Agents who fail to file an affidavit when due, may be subject to a fine by DFS up to $50 per day for each day the neglect continues, beginning the day after the affidavit was due until the date it was received by FSLSO.
Eligible Insurers

It is imperative that surplus lines business only be placed with companies eligible to do business in Florida. Below are links to Florida Eligible, Federally Authorized and NAIC International Insurers Department (IID) companies.

Florida Office of Insurance Regulation (OIR) lists:

National Association of Insurance Commissioners (NAIC) list:

Quarterly Listing of Alien Insurers (IID list)

Policy Fee
Per F.S.626.916 (4) and (5) effective July 1, 2019, a reasonable per-policy fee may be charged by the filing surplus lines agent for each policy certified for export and the per policy fee must be itemized separately to the customer before the policy purchase and enumerated in the policy. The policy fee is allowed to be charged one time per policy term, even if multiple agents are involved in the placement of coverage. An agent should not retain any fee over the stated policy fee amount.

Also, effective July 1, 2019, the retail or producing agent may also charge a reasonable per-policy fee for placing a policy in the surplus lines market and the per policy fee must also be itemized separately to the customer before purchase.
Information Required on the Contract

Per F.S. 626.922 and 626.924, there is certain information required to be placed on a surplus lines contract. FSLSO provides a Sample Face Page containing this required information.

Download Sample Face Page

Definition of Premium for Taxation
For the purpose of calculating the premium receipts tax due pursuant to F.S. 626.932, the term “premium” means the consideration for insurance by whatever name called and includes any assessment, or any membership, policy, survey, inspection, service, or similar fee or charge in consideration for an insurance contract, which items are deemed to be a part of the premium. The per-policy fee authorized by F.S. 626.916(4) is specifically included within the meaning of the term “premium.”  However, the service fee imposed pursuant to F.S. 626.9325 is excluded from the meaning of the term “premium.”
Risk Purchasing Groups
Any Florida risk where coverage is obtained through a risk purchasing group from a surplus lines carrier shall file the premium and taxes through the FSLSO SLIP or XML Batch
Taxation Vessels
A vessel is considered a Florida risk for filing and tax purposes if it is registered or flagged in Florida.

Taxes, Fees, & Assessments

Tax
Surplus lines insurance policies with an effective date on or AFTER July 1, 2020 are subject to a 4.94% premium receipts tax. 

Surplus lines insurance policies with an effective date BEFORE July 1, 2020 are subject to a 5% premium receipts tax. 

The surplus lines agent shall collect from the insured the amount of tax due at the time of delivery of a cover note, certificate of insurance, policy or other confirmation of insurance, in addition to the full amount of gross premium charged by the insurer for insurance. The surplus lines agent is prohibited from absorbing such tax as an inducement for insurance or for any other reason, rebating all or any part of such tax or commission.

The tax applies to all surplus lines insurance policies, including additional premium endorsements written on behalf of Florida insureds, except insurance risks for state government or its agencies, or of any county, municipality, or of any agency thereof. Insurance premiums for wet marine and transportation, or aviation risks written in accordance with F.S. 626.917, are also exempt from the premium receipt tax. Insureds and coverages that are not subject to the Florida surplus lines tax shall still be filed through the FSLSO SLIP for information, fee, and assessment purposes.
Definition of Premium for Taxation
For the purpose of calculating the premium receipts tax due pursuant to F.S. 626.932, the term “premium” means the consideration for insurance by whatever name called and includes any assessment, or any membership, policy, survey, inspection, service, or similar fee or charge in consideration for an insurance contract, which items are deemed to be a part of the premium. The per-policy fee authorized by F.S. 626.916(4) is specifically included within the meaning of the term “premium.”  However, the service fee imposed pursuant to F.S. 626.9325 is excluded from the meaning of the term “premium.”
FSLSO Service Fee
The service fee is established by FSLSO Board of Governors and approved by OIR. The service fee assessed for each policy, cover note or other confirmation of insurance and other premium bearing documents submitted to FSLSO, shall fund the services performed by FSLSO.

The service fee shall be collected from the insured and paid by the surplus lines agent. Service fees should be shown separately on all policies, binders, additional premium endorsements and other confirmations of insurance and must be labeled “service fee.” The service fee should be charged on all surplus lines insurance policies gross premium (plus policy and inspection fees). This includes additional premium endorsements written on behalf of Florida insureds, except insurance risks for state government or its agencies, or of any county, municipality, or any agency thereof. Insurance coverage of wet marine and transportation or aviation risks written in accordance with F.S. 626.917, is subject to the service fee. The surplus lines agent is prohibited from absorbing such fee or, as an inducement for insurance or for any other reason, rebating all or any part of such fee or commission.

The EMPA surcharge and the Citizens assessment are not subject to the service fee and the premium receipt tax.

The service fee is not included in the tax computation and should be shown separately on the declaration page. FSLSO will collect the service fee by generating an invoice specific to the FSLSO service fee that will be sent along with the premium receipts tax invoice on a quarterly basis.

All new and renewal policies (and subsequent endorsements) with an effective date on or after April 1, 2020 = 0.06%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2017 - March 31, 2020 = 0.1%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2016 - March 31, 2017 = 0.15%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2014 - March 31, 2016 = 0.175%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2013 - March 31, 2014 = 0.2%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2007 - March 31, 2013 = 0.1%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2006 - March 31, 2007 = 0.2%

All new and renewal policies (and subsequent endorsements) with an effective date between April 1, 2004 - March 31, 2006 =0.25%

All new and renewal policies (and subsequent endorsements) with an effective date before April 1, 2004 = 0.3%
EMPA Surcharge
Effective January 1, 2006, FSLSO began collecting the EMPA surcharge. While the EMPA surcharge is not new, the 2005 Legislative Session amended F.S. 252.372, to authorize FSLSO to collect the surcharge. The surcharge is $2.00 for certain residential property coverages and $4.00 for certain commercial property coverages. Single state and multistate (Florida home state) policies will be invoiced quarterly for the EMPA surcharge based on the coverage codes identified. The EMPA surcharge is fully earned, unless the policy is cancelled flat and the transaction is backed out.

Certain residential property policies with an effective date on or after January 1, 2006 = $2.00

Certain commercial property policies with an effective date on or after January 1, 2006 = $4.00

View EMPA Applicable Coverages
Citizens Assessment

The Florida OIR directed FSLSO, by order, to discontinue remitting and reporting related information applicable to transactions submitted to, or received by, the Florida Surplus Lines Service Office after March 31, 2020. The Citizens assessment will not be charged or refunded after March 31, 2020.

View CPIC Applicable Coverages

FHCF Assessment

The Florida OIR directed FSLSO, by order, to discontinue remitting and reporting related information applicable to transactions submitted to, or received by, the Florida Surplus Lines Service Office after March 31, 2019. The FHCF assessment will not be charged or refunded after March 31, 2019.

View FHCF Applicable Coverages


Multistate Policies

Nonadmitted and Reinsurance Reform Act (NRRA)

The  Nonadmitted and Reinsurance Reform Act (NRRA) of 2010 was enacted as part of the Dodd Frank Wall Street Reform and Consumer Protection Act. The bill included language to standardize the reporting, allocation and payment of non-admitted insurance premium tax on multistate risks.

The NRRA grants the insured’s home state exclusive authority to regulate and tax surplus lines insurance that includes multi-jurisdictional boundaries. Additionally, the NRRA recognized the Exempt Commercial Purchaser and provided a nationwide standard for the automatic export of risks for these qualified insureds. Lastly, the NRRA established uniform standards for surplus lines eligibility regarding insurers both domiciled inside and outside of the United States.

View more information on the NRRA

Reporting and Taxation of Multistate Policies
According to F.S. 626.932, when Florida is determined to be the home state, regardless of the location of the risk (except for premium associated with risk outside the United States and its territories), the entire surplus lines premium must be filed with FSLSO.

Multistate risks with an effective date on or after July 1, 2020 will be taxed at 4.94% regardless of where the risk or exposure is located.

Multistate risks with an effective date before July 1, 2020 will be taxed based upon that respective state’s (or states’) tax rate and percentage of exposure. 

It is FSLSO’s guidance that when a Florida home state insured has a multistate policy where the surplus lines insurer happens to be admitted in one of the state allocations, the agent report the entire premium of the policy.