Surplus Lines Information
What is surplus lines insurance?
Surplus lines insurance is insurance placed with unauthorized insurers through surplus lines agents or brokers. A surplus lines broker is one licensed to procure insurance under DC Code 31-2502.40.
What is a surplus lines insurer?
A surplus lines insurer is one that does not hold a certificate of authority to do insurance business in the District of Columbia, but a surplus lines agent or broker procures insurance through a surplus lines insurer.
What regulations are unauthorized insurers subject to?
The placement of insurance with an unauthorized insurer is subject to DC Code 31-2502.40. Risks insured by unauthorized insurers must be placed and serviced by District of Columbia licensed surplus lines agents or brokers.
May surplus lines agents place risks with any unauthorized insurer?
No agent or broker shall procure policies from unauthorized companies (1) without exercising diligent effort to secure the required business in duly authorized companies; (2) whose standards of solvency and management do not meet the requirements necessary for the protection of the policyholders; (3) for any risk which could be placed with an authorized company except for abnormal provisions of the policy; and (4) which covers a risk of a class generally covered in the District by authorized companies and which authorized companies would cover at a rate not higher than that charged by authorized companies on other District risks of the same class.
Are surplus lines insurers required to file Annual Statements with the DISB?
Unauthorized insurers (“surplus lines insurers”) are not required to file Annual Statements with the DISB.
Are surplus lines insurers required to have a license or register with the DISB?
No. Surplus lines insurers are not required to have a license or register with the DISB. Also, the District of Columbia does not have "approved" surplus lines insurers and DISB does not maintain any such list.
What procedures does a surplus lines agent have to follow?
The surplus lines agent or broker must follow procedures outlined in DC Code 31-2502.40, including monthly reporting under affidavit of all unauthorized business placed during the month by the 10th day of the following month.
- Surplus Lines Brokers Premium Tax Filing Instructions [PDF]
What records does a surplus lines agent have to keep?
The surplus lines agent or broker must maintain a separate account of the business transacted under DC Code 31-2502.40, which shall be open at all times to the inspection of the Commissioner.
Is surplus lines business subject to District of Columbia tax?
Insurance business transacted under the surplus lines statue, DC Code 31-2502.40, is subject to a premium tax of 2 percent of gross premiums. All premium taxes collected by the surplus lines agent shall be reported and forwarded to the Commissioner semiannually on or before February 1 and August 1 of each year, for policies procured during the immediately preceding six-month period ending December 31 and June 30 respectively. Gross premium shall include the premium or charge specified in the policy and applicable to such insurance, and any and all other revenue earned or fee charged that is incidental to placing the risk. A Surplus Lines Agent may only charge fees which are incidental and necessary to placing the risk. Any fee charged must be itemized separately.
What is the process for becoming licensed as a Surplus Lines Agent or Broker?
An applicant may obtain a producer’s license with surplus lines authority by going to nipr.com. All applicants for surplus lines authority must have or obtain simultaneously casualty authority. Also, non-resident applicants must have surplus lines in their resident state at time of application.
For information on how to file insurance complaints call (202) 727-8000 and ask for DISB's complaints unit.