Placing Coverage Properly versus Improperly
One of the Florida Legislature's stated purposes of the Surplus Lines Law
is to protect authorized insurers from unwarranted competition by
unauthorized insurers who are not subject to the same requirements.
Additionally, there is no guaranty fund for unauthorized insurers if one
should become insolvent, thus offering no consumer protection. It's
for this reason, Florida law states that a surplus lines agent cannot
export insurance coverage for a person's risk when the risk is already
covered by, or can be covered by, an admitted/authorized insurer. The
Department issued a bulletin in 1997
to further remind the industry that doing so is a violation of the
Florida Insurance Code, as the policy is procurable from an authorized
insurer. General lines agents are reminded that if they are unable to
place a risk with an admitted carrier (either a company with whom they
are appointed or through another agent appointed by an admitted
company), they must utilize a Florida licensed and appointed surplus
lines agent if they export the risk to an eligible surplus lines
insurer. For example, if an admitted/authorized insurer were willing to
write a home owner's insurance policy excluding wind coverage, then
provided all the requirements of Section 626.916, F.S., have been
fulfilled, the surplus lines agent would be permitted to export the wind
coverage, and only the wind coverage.
626.916, Florida Statutes]
Click here to read the 97-007 bulletin >>
Surplus Lines: Diligent
Prior to exporting a risk to the surplus lines market, a legitimate diligent effort is required to be
conducted by the producing agent of insurers
authorized to transact and actually write that kind and class of insurance in Florida. Surplus lines agents must verify that the
diligent effort has been made by requiring a properly documented statement of diligent effort from the retail or producing agent.
However, to be in compliance with the diligent effort requirement, the surplus lines agent's reliance must be reasonable
under the particular circumstances surrounding the export of that particular risk. Reasonableness shall be assessed by taking into
account factors which include, but are not limited to, a regularly conducted program of verification of the information
provided by the retail or producing agent. Only searching insurers that an agent knows will not place coverage for the risk is a violation of Florida law.
Fraudulently completing a diligent effort form (e.g. fake contact names, dates, signatures) is a serious violation and
be prosecuted by the Department.
626.916, Florida Statutes]
Bail Bond Agents: Go Get
Before April 1 of this year, all bail bond agents must:
Failure to do so can result in the county refusing to accept bail bonds from you.
We may open a formal investigation into the business activities of any bail bond agent who fails to
register or file the renewed power of attorney form as required.
- Register with the sheriff and the clerk of the court
- File a certified copy of the renewed power of attorney to represent your surety company.