Thursday, April 15, 2010

Pennsylvania issues bulletin on surplus lines filing responsibility

Because of confusion over some new developments, the Pennsylvania Surplus Lines Association has issued a bulletin regarding who is responsible for surplus lines filings to repeat that the party who represents the insured is still responsible for the Producer Affidavit, and the party who negotiated and bound the placement in the surplus lines market is still responsible for the Surplus Lines Affidavit.

A copy of the bulletin is available to download and anyone with questions is encouraged to review it.

The bulletin notes that surplus lines filings require 1) a producer who represents the insured AND 2) a surplus lines licensee who is empowered to enter the non-admitted, surplus lines market. This can be two different parties or one party functioning as both licensees.

Operating in the surplus lines market differs from the standard or admitted market where the producer represents both the insured and is also empowered to enter the ADMITTED or LICENSED marketplace. The difference is the Surplus Lines Law and its Regulations shifts responsibility from that of the carrier (which is non-admitted) to the licensee.

What is required is an electronic filing for each placement made, a monthly report stating all surplus lines transactions during the month, and an annual surplus lines premium tax report to the Department of Revenue at the end of each calendar year with a copy submitted electronically to PSLA.

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