In order to place a risk with a surplus lines carrier, the retail/producing agent involved must complete a diligent effort search. There are a few exceptions to this requirement. The most common “bypass” for the diligent search requirement is the use of a state’s export list.
Businesses registering with the Secretary of State’s Office or seeking to add a “DBA” name to their insurance license and/or Certificate of Authority often express surprise when we mention newspaper publication requirements; to notify the public that an entity will transact business or use a fictitious/trade name in a particular jurisdiction.
The role of the Designated Responsible Licensed Producer is to personally guarantees the entity’s regulatory compliance for specific lines of authority. When choosing your Designated Responsible Licensed Producer, there are four important factors to keep in mind.
Insurance agencies and their producers are busy, though sometimes, being busy can lead to overlooking important deadlines, such as insurance license renewals. These are important requirements, and state insurance regulators do not take them lightly.
Insurance state regulators expect licensees to demonstrate the highest standards of professional and ethical conduct. When they fail to do so, the result is often a consent order, which must responded to promptly and correctly.
Insurance agencies with surplus lines licenses have some special compliance requirements that those handling only admitted insurance do not, such as the “zero reports” statement to state regulators.
Dropping the ball on regulatory issues can halt insurance agency growth, disrupt service, and result in costly penalties. Agencies need an experienced partner to ensure compliance full time.
The term “lapsed” refers to an insurance license that the holder does not renew at the time of its expiration date, but which state regulators have yet to administratively terminate.
Insurance businesses operating in a state other than their domicile jurisdiction need to register with the Secretary of State as a foreign corporation for a Certificate of Authority. Failing to complete these tasks in a timely manner can impact your ability to do business in that state.