April 3, 2019

Reminder: FHCF Assessment Ended 3/31

All outstanding endorsements to policies which were effective between January 1, 2007 and December 31, 2014, when the FHCF assessment was applicable, should have been filed by March 31, 2019. Effective April 1, 2019, any submissions previously filed where the FHCF assessment was applied that may have current endorsements to be filed, will not have the FHCF assessment charged or returned.

Example:

Invoices for first quarter submissions went out on Monday, April 1, 2019. All payments are due no later than May 15, 2019 and any refund requests for FHCF credits must be received by our office no later than April 30, 2019. 

For more information and further instructions, read issued bulletin or contact the FSLSO Accounting Department at 800-562-4496, option 4, or accounting@fslso.com.

Compliance Review Scores Are In

Scores are still high as we move into 2019.

The overall score for the fourth quarter of 2018 was 96%. Great job!

Categorical averages are:

Keep up the good work.

Remember, we have several compliance tools you can take advantage of.

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

How to Read and Reply to a Compliance Review Exam Summary Report

All licensed and appointed surplus lines agents, whether resident or nonresident, are subject to a Compliance Review at least once every three years. The purpose of the Compliance Review is to ensure that surplus lines agents are in compliance with the statutory requirements relative to the sales of surplus lines insurance contracts, to measure the quality of service provided in the surplus lines market place, and to provide educational assistance to surplus lines agents when necessary.

Within 30 days of the review, the surplus lines agent will receive a Compliance Review Exam Summary Report from FSLSO via email. Pay close attention to the instructions in this email, as a corrective action response addressing non-compliance findings in the report may be required.

The Compliance Review Exam Summary Report is divided into four main sections.

Section A: Grades

This section provides the agent’s grades for the Financial, Regulatory, and Data categories. Percentage grades are provided for each question which makes up the overall category grades.

Section B: Review Exceptions

This section lists policy exceptions/discrepancies found during the compliance review. Exceptions appear based on exam question responses entered by the Compliance Review Field Analyst. This section only lists non-compliance findings.

Section B is divided into four question categories: Agent, Data, Financial, and Regulatory.

Section C: Unfiled Policies

Unreported premium bearing transactions discovered through the Compliance Review Program will be noted in this section.

Agents are required to file all premium bearing transactions within thirty (30) days from the effective date shown on the policy documentation. Transactions identified as unfiled must be submitted to FSLSO immediately. Unfiled transactions 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).

Section D: General Comments

This final section may contain additional information about the review, instructions or links to pertinent educational resources.

As mentioned earlier, pay close attention to the email from FSLSO. A Corrective Action Form, addressing non-compliance, may be required. Corrective Action Forms are due 30 days from the date the agent receives the request.

If you have questions about the Compliance Review Process, please contact Felicia Meredith at 800.562.4496 ext. 105.

Surplus Lines License Self-Appointment

All surplus lines agents are required to complete the self-appointment for their surplus lines 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. To self-appoint, go to the Department of Financial Services (DFS) website and click on MyProfile. Once logged in to your MyProfile account, click on Access eAppoint and follow the on-screen instructions.

Agents are prohibited from transacting surplus lines business without being properly licensed and appointed. A requirement of maintaining a surplus lines license is also holding a qualifying general lines license and appointment. It is very important to maintain both the qualifying license and appointment.

Failure to maintain an active self-appointment and at least one appointment from an admitted insurance company for the general lines license will result in suspension of the agent’s surplus lines license. The qualifying general lines license appointment cannot be an unaffiliated appointment (defined in Florida Statute 626.015 (20)).

Are Your Transaction Filings Balanced?

Make sure your transaction filings are accurate. 

We have said it before and are saying it again. Accurate transaction filings are very important for you as the taxpayer and us as the tax collector for the State of Florida.

Recently, while analyzing a report we noticed the premium reported for certain coverages was equal to the coverage A amount that was reported for the supplemental homeowners data on several filings.

Knowing a structure was being insured for the same amount as the premium charged was most likely an error, we contacted the agents on the report giving them the opportunity to review and correct these filings. They were, of course, incorrect and over $300,000 in taxes was returned to the agents.

This example clearly shows that ensuring your transaction filings are balanced helps both you, the agents and us, FSLSO. 

So, make sure your transaction filings are accurate. Yep, we said it again.

When in doubt, check with your accounting department to verify what you are being invoiced equals what you have actually brought in.

What’s a NAG?

There are many reasons a transaction filing via SLIP or XML Batch may be questioned. A NAG TIQ comes up when the surplus lines agent is unknown or ineligible. 

We have to wonder what our programmers were thinking when they chose the name of this TIQ. ¯\_(ツ)_/¯

This questioned transaction has to be manually processed by an FSLSO staff member. A NAG occurs when a filing is submitted and the surplus lines agent was not licensed and/or self-appointed on the effective date of the transaction. Florida requires the surplus lines agent to be licensed and self-appointed when exporting coverage to the surplus lines market.

Several reasons can cause the unknown or ineligible surplus lines agent (NAG) TIQ, such as a temporary lapse of the agent’s surplus lines self-appointment or the agent is placing business before completing all licensing requirements.

Remember: your self-appointment must be renewed every two years during your birth month. Stay compliant.

Facilitating Compliance Through Innovative Solutions

www.fslso.com