The Governor of California has signed Senate Bill 131, which specifies that certain filing requirements now applies to certain surplus line brokers.
The bill, which was signed into law, requires that the information in a sworn statement be expanded to include certain premium information for single and multistate risks. Requires the filing to apply to a home state insured that directly procures insurance with a nonadmitted insurer. Requires that when multiple brokers are involved in placing a policy, only the one responsible for filing the report would be considered transacting business for tax purposes.
This bill would specify that the sworn statement filing requirements apply to surplus line brokers placing business for a home state insured. The bill require that the information in the sworn statement be expanded to include the total amount of gross premium, the total gross premium for single state risks where 100% of the premium is attributable to risks in California, and for multistate risks, the percentage of gross premium allocated to California and each other state. The bill also requires that the sworn statement filing also apply to a home state insured that directly procures insurance with a nonadmitted insurer. However, the bill authorizes the commissioner to waive or modify any of the foregoing requirements by public notice published on the department's Internet Web site.
The bill changes the definition of "business done" or "business transacted" to mean all insurance business conducted by a surplus line broker for a home state insured or directly procured by the home state insured. The bill also requires that when 2 or more licensed surplus line brokers are involved in placing a policy, only the one responsible for filing the confidential written report, as specified, would be considered transacting business for tax purposes, and only one licensed surplus broker would be required to include the policy in his or her sworn statement.
The surplus line broker required to include the policy in his or her sworn statement would be either the one responsible for negotiating, effecting the placement, remitting the premium to the nonadmitted insurer or its representatives, and filing the confidential written report, or the one surplus line broker delegated the responsibility for the filing of the confidential written report pursuant to a written agreement, as provided.