September 6, 2018

COMPLIANCE REVIEW SCORES ARE IN

And they are fantastic! We are happy to announce that the average is 96%. Pat yourself on the back for a job well done.

Categorical averages are:

Anchors & Elevators

While the overall score is high, there are a few areas that pulled the average down.

Agent represented that they have a regularly conducted program to verify the diligent effort information provided by the retail or producing agent or understands the need for such program

94%

Let us help you turn these anchors into elevators by taking advantage of the many tools FSLSO offers. 

Familiarize yourself with the Agent Procedures Manual, which provides everything you need to know about surplus lines rules, compliance, and much more. 

You can also take advantage of our Lunch and Learn program, which provides hands on customized training to your staff. Our analysts will come to your office and train, teach, or discuss anything you wish to know more about. 

If you have any questions, feel free to call us at 800.562.4496 or send an email to outreach@fslso.com.

REMEMBER: THE "HOME STATE" STILL RULES

NIMA (Non-Admitted Insurance Multi-State Association) may have dissolved, but the "home state" rule still applies when issuing a multistate policy.

Florida is no longer in a tax sharing agreement; however, all rules pertaining to home state and multistate policies remain, just as they did when we were in a tax sharing agreement. The only change is Florida no longer shares the taxes with any other states.

Florida continues to tax the premium at the rate where the risk or exposure is located.

Definition of HOME STATE:

— NOUN

1. The state in which an insured maintains its principal place of business or — in the case of an individual — the individual’s principal residence. 

2. The state that has the largest percentage of premium, if 100% of the risk is located outside of the insured’s home state.

Also remember a policy's "home state" may change mid-term. If this occurs, continue using the original home state until the renewal of the policy. Upon renewal, different guidelines may apply because there will be new "home state" rules and filing requirements to follow.

Pay close attention to the details when submitting filings for multistate risks, as it is important to allocate the premium correctly. It's also very important to determine the home state, especially when filing a renewal.

Always ask yourself “has the home state changed?”

When submitting a new policy in SLIP, one of the required data fields is Agency.

For the Agency field, you should select the agency name and license number the surplus lines agent is associated with. If the surplus lines agent is only associated with one agency, the Agency field should remain the same for every policy submitted in SLIP.   

If no agency appears in the dropdown menu on the Policy Information screen, you will need to go to the Settings page under the User Admin tab, then select your agency under the Agency Assignment section. The Agency Assignment section provides a list of Florida licensed agencies.

If your agency name and license number are not in the Available Agencies box, contact Agent Services at agent.services@fslso.com. If the agency is licensed as required by the Department of Financial Services (DFS), we will add the agency to the FSLSO database.

For those of you who have been filing for some time, when submitting a new or renewal policy in SLIP, please verify the agency name and license number you are using are still correct. Remember, if only one agency has been selected under the Agency Assignment, the Agency field is automatically populated when filing a new policy in SLIP.

Here are a few reminders to help you avoid some common compliance mistakes.

There are 15 reasons your transaction may be questioned or TIQ’d. One of the most common, confusing, and misunderstood TIQ is the EE2, Extends Policy Expiration Date.

This type of TIQ occurs when an endorsement is filed that extends the policy expiration date 365 days or more.

This TIQ was added after we began collecting the emergency assessment for the Florida Hurricane Catastrophe Fund (FHCF), the Citizens (CPIC) assessment, and the EMPA surcharge.

We noticed insurers often extend policy terms upon the expiration date for 365 days or more via an endorsement instead of issuing a renewal policy, leaving the original effective date the same for years. For this reason a business rule was created to ensure policyholders only get assessed the current tax, fee, and assessment rate. Without this business rule in place, insureds would be unfairly charged assessments that have long since expired.

This TIQ may be difficult to understand because we are asking you to file a renewal transaction even though the insurer issued an endorsement. However, the EE2 is a very important TIQ. Please note, the insurer is not required to reissue the endorsement as a renewal, this is a FSLSO filing requirement.

Currently there are no assessments being levied on insurance premiums, only the EMPA surcharge still exists on certain property coverages, but for those of you that have witnessed past assessments you know they can be as high as 6% of the premium or as low as 1%. This is precisely why the EE2 TIQ was implemented; to charge the insured the most current rate based on an annual term.

For more information concerning the other 14 reasons a transaction may be questioned please refer to the Transactions in Question (TIQs) section in the SLIP HELP Reference Guide under the Help tab in SLIP.

Who doesn’t hate calling a main line and getting transferred to 10 people before finally leaving a voicemail for the wrong person?

Hopefully, the following list will clear things up for you when dealing with the FSLSO staff. Give us a call at 800.562.4496, option 1 or find who you are looking for by selecting from the extensions listed below. The FSLSO staff is here to help you with any questions you may have.

Product & Business Development

If you are looking for information on FSLSO's educational tools, the FSLSO website, or need help submitting an XML Batch filing give the Product & Business Development team a call or send an email to PBD@fslso.com.

Facilitating Compliance Through Innovative Solutions

www.fslso.com