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Education - The Surplus Line Association of California Training Manual
What is Filed? The Surplus Line Association of California For all new and renewal policies, the following documentation must be provided within 60 days of placing the insurance with a nonadmitted insurer:
For all endorsements, the following documentation must be provided:
For all endorsements extending the policy term for more than 90 days, the following documentation must be provided:
Endorsements extending the policy term for more than 90 days are treated as renewals and must include a completed SL-1 form and SL-2 form (when applicable).
Filings should be submitted in batches of no more than 75 documents, with a cover sheet. If filings exceed 100 items monthly it is recommended batches be filed weekly or at least twice monthly. When the Association Receives Filings
Each batch of filings received at the SLA is assigned a broker control sheet which consists of the following information: the broker's name, the broker's assigned SLA number, date received, postmark date, a batch number, total number of items in the batch and the total premium amount to be filed. This information is recorded in our database. All documents filed with the SLA as required by law are the property of the DOI and will be divulged, or open to inspection, only as authorized by the DOI. The SLA treats all such documents as confidential. The DOI 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 DOI 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. Additional Explanations and Definitions 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 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 eligible surplus line insurers without the need for a Diligent Search Report, although surplus line brokers must continue to file a Confidential Report of Placement. Effective 1/1/97 the DOI issued the first official California Export List. Refer to CIC Section 1763.1 for additional information on the Export List and SLA Bulletin #913 for a copy of the Export List coverage codes. Commercial Insureds Placements involving commercial insureds (also referred to as "exempt commercial purchasers") as defined in CIC 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 nonadmitted insurer. To determine whether an insured qualifies as a commercial insured, see the SLA's California Exempt Commercial Purchaser Checklist. A Confidential Report of Placement is required for a commercial insured placement. 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. Nonadmitted Insurer A "nonadmitted insurer" is an insurance company or syndicate licensed in at least one state or country but not in California. Also known as a "surplus line" insurer. Nonadmitted insurers domiciled in the United States are called "foreign" insurers and those domiciled in another country are "alien" insurers. Eligible Nonadmitted Insurer An eligible nonadmitted insurer is a nonadmitted insurer that meets eligibility requirements for placements with California home state insureds by surplus line brokers. As provided in CIC section 1765.1, a foreign insurer must have $45 million in capital and surplus and be licensed for the line of business in its state of domicile to be eligible and an alien insurer must be listed on the Quarterly Listing of Alien Insurers maintained by the NAIC International Insurers Department ("IID"). Placements for California home state insureds may not be made with an eligible insurer until documentation of eligibility as specified in CIC section 1765.1(c) is filed with the DOI by the insurer or a surplus line broker on behalf of the insurer. Approved Nonadmitted Insurer An "Approved Nonadmitted Insurer" (also called a "LASLI Company") is a surplus line insurer listed on the list of approved surplus line insurers ("LASLI") by the DOI. Approved nonadmitted insurers are eligible for surplus line placements for California home state insureds. Ineligible Company An "ineligible company" is a nonadmitted insurer that has not been approved by the Commissioner for placements of surplus line risks by California surplus line brokers and that does not qualify as an eligible nonadmitted insurer under CIC section 1765.1. Gap Insurer A "gap insurer" is a nonadmitted insurer that is not an eligible insurer, but can be used for placements of California surplus line risks on a limited basis if certain conditions are met. Refer to CIC Section 1765.1(h) for Gap placement conditions and requirements. Objected Company
An "objected
company" is an ineligible nonadmitted insurer found by the Insurance Commissioner to be unacceptable for use in Gap placements. 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 nonadmitted 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. [NOTE: From recent discussions with the CDI, we understand that the requirement to send copies of the D-1 to all other agents, brokers or surplus line brokers will be considered satisfied if the surplus line broker obtains and maintains a copy of the signed D-1.] Refer to Exhibit VI for a sample of the D-1 statement. 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 nonadmitted 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. Refer to Exhibit VII for a sample of the D-2 statement. 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 as provided in paragraph (a) or (b) below:
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