Filing Requirements with the Surplus Line Association

Filing Requirements with the Surplus Line Association

THE SURPLUS LINE ASSOCIATION OF CALIFORNIA FILING REQUIREMENTS FOR THE SURPLUS LINE ASSOCIATION OF CALIFORNIA CREATING A BULK SUBMISSION (AKA BATCH) Table of Contents Creating a Bulk Submission. 3 Coversheet Contents. 4 Coversheet Example. 5 Documents Required for Filings.. 6 Order of Documents within a Batch 7 Policy Content. 8 SL-1 Form 9 SL-1 Instructions. 10 SL-2 Form 11 SL-2 Instructions. 13 Exceptions to Diligent Search... 14 Submission 20 2 Creating a Bulk Submission All bulk submissions must be accompanied by a coversheet that includes all the transactions that are included in the upload. New and renewal policy should be submitted

within 60 days of the policy effective date. The submission must contain: Batch Coversheet (for paper filings) Copy of the Declarations Page, Certificate, Cover Note or Binder Completed copy of the SL-1 Lloyds Syndicate List, if applicable Completed copy of the SL-2 (if applicable) 3 Batch Coversheet Contents (for paper filings) Filings should be submitted with a maximum of 75 policies and/or endorsements for easier reconciliation. Submissions must be accompanied by a coversheet which includes: Assigned SLA broker number (especially for brokerages with multiple branches) Exempt Commercial Purchaser/Commercial Insured checkbox Insureds name Transaction type Policy number Premium amount (including taxable fees) Stamping fee Surplus line state tax Invoice date

California % premium allocation (for multi-state risks)even if 100% of the premium is to be filed in California, the CDI wants to track what the % of premium would have been filed in California pre NRRA. Total amount of items and premium *Including the name and contact information for the person responsible for creating the batch would enable SLA correspondence to be directed to the 4 appropriate party. CI/ECP refers to the AB315 definition of commercial insured or the NRRA definition of exempt commercial purchaser. Refer to California Insurance Code section 1760.1. The checklist is on the following slide. %CA refers to the percentage of premium allocated to California if there was no home state rule. 5 Documents Required For Filings For paper, emailed or bulk submission upload filings only: Coversheet For all filings: New and renewal transactions must include: Copy of the Declaration Page, Certificate, Cover Note or Binder Lloyds syndicate list (if applicable) Completed copy of the SL-1 Completed copy of the SL-2 (unless the coverage is on the current export list or the insured qualifies under AB315s definition of commercial insured) Extension endorsements extending the policy term for more than 90 days in the aggregate during any 12-month period must include: Copy of the extension endorsement Lloyds syndicate list (if applicable) Completed copy of the SL-1 Completed copy of the SL-2 (unless the coverage is on the current export list or the insured qualifies under AB315s definition of commercial insured)

Endorsements and cancellations must include: Copy of endorsement 6 Order of Documents DILIGENT SEARCH R E P O R T SL-2 BRYAN S M I T H 1.Form (Please Refer to the Instructions on Page 3 of This Form) hereby submits that he/she is: (Full Name of the Individual) (A) Duly licensed under California Department of Insurance license number ; OR (B) Duly licensed and authorized to act as an endorsee on the organizational license of , California Department of Insurance license number 0999999 AAAA Insurance Brokers, I n c . ; Policy Number: X F 1 0 0 0 3 P r e m i unamed m : 5,125.00 and (C) that he/she or said o r g a n i z a t i o n a l l i c e n s e e was e n g a g California e d by the insured herein, or the i n s u r e d ' s broker, to obtain (Name of Organization) SL-1 Form insurance as described in this report; CONFIDENTIAL REPORT OF SURPLUS LINE PLACEMENT

and (D) is the licensee who performed or supervised this diligent search. Please refer to the instructions on Page 2, and the attached current California Export List for assistance in completing this form. Please check ONE 2. box only:(A ) Name of Insured The following information, accompanied by a copy of the declarations page or certificate or binder, is submitted for an (B) Address of Insured insurance coverage or risk listed on the current California Department of Insurance Export List. (California Insurance Code (Street and Number) Section 1763.1) Lloyds (City) (State) (Zip Code) The following information, accompanied by a copy of the declarations page or certificate or binder, and a fully executed (C ) Description Syndicate copy of the diligent search report (SL-2 Form),of is Risk submitted in accordance with California Insurance Code Section 1763(a). (e.g. Laundromat, liquor store, NOT TYPE OF COVERAGE) (D) Location of Risk List (Street and Number) 1. Declaration s Page hereby submits that he/she is: (A) (City) a duly licensed surplus line broker, license number

(B) a transactor on the surplus line license o f ; or, (E) Type of Insurance coverage (State) (Zip Code) (Enter Appropriate Code Number from Pg. 3) ( N a m e of Organization) (C) and, 3. (License If Number) Private Passenger Automobile Liability Insurance is identified on line 2(E), complete the following: that he/she or(A) said organizational licensee was engaged by the insured, or the insured's broker, Does the insured qualify as a "Good Driver" under Section 1861.025 ofnamed the California Insurance Code? herein, to obtain insurance against certain risk as described in this report. (CHECK ONE)

2. Cover Sheet RISK DESCRIPTION (B) NO Does the coverage that you have placed include, in whole or in part, the limits of coverage provided under the California Automobile Assigned Risk Plan (CAARP)? (CHECK ONE) YES NO (A ) N a m e o f In s u re d (B ) A d d r e s s o f I n(C) s u re d (C ) D e s c r ip t io n o f t h e R is k (D) 10700(x) of the California Insurance Code? (CHECK ONE) Location of the R is k ( S t r e e t and Number) If YES, has this risk been submitted to and found to be ineligible by CAARP? (Street and Number) (CHECK ONE) YES NO If your(City) answer is NO, then this coverage cannot be placed with a non-admitted insurer. (See Insurance Code section 1763.5)

(State) (Zip Code) 4. 5. (E ) 3. YES (e.g. Laundromat, Liquor Store, NOT TYPE OF COVERAGE) If Health Insurance is identified on line 2(E), does the insured qualify as a "Small Employer" under S e c t i o n YES N O (City) (State) ode) If this insurance was placed pursuant to Section 125 et seq. of(Zip theCCalifornia Insurance Code governing transactions with risk purchasing groups authorized by the Federal Liability Risk Retention Act of 1986, complete the following: (Coverage Codes listed on Page Two; Export List Codes listed on Export List) (A) Provide the name and address of the p u r c h a s i n g group of which the insured is a member: 7 E x p o r t L is t C o d e O R C o v e r a g e C o d e PLACEMENT DESCRIPTION List Nonadmitted Insurer(s) Underwriting This Policy with % of Premium. (Include an attachment if additional space is needed or attach a line slip) If GAP provision applies, please include GAP Exemption Form-Attachment. Policy Content California Insurance Code Section 381 list the required contents on the policy: Parties between whom the contract is made, insured and insurer Property or life insured

Interest of the insured in property insured, if he is not the absolute owner Risks insured against Policy period Premium 8 SL-1: Confidential Report of Surplus Line Placement Policy number California premium plus taxable fees Full name of transactor who placed the risk Individual license number, or name of business entity and entitys license number Name of insured as stated on the policy declaration page Insured address Risk description, not type of coverage Physical location of risk, not P O Box Coverage or export code from instructions Name of nonadmitted insurer as stated on the policy declaration page Signature of licensee named on line 1; electronic facsimile is acceptable Percentage of premium

allocated for each nonadmitted insurer Date of signature This form is available on the SLA website: http://www.slacal.org/docs/default-source/general-cont ent-documents/Filing-Forms/sl-1-form-printable.pdf?sfv rsn= 9 SL-1 Instructions Confidential Report Page 2 INSTRUCTIONS WHAT MUST ACCOMPANY THE CONFIDENTIAL REPORT OF PLACEMENT (A) If the insurance coverage or risk is currently listed on the California Export List, this Report must be accompanied by a copy of the declarations page or certificate or binder. (B) If the insurance coverage or risk is not listed on the California Export List, this Report must be accompanied by the declarations page or certificate or binder, and a fully completed Diligent Search Report (SL-2) Form). (California Insurance Code Section 1763(a)) Note: A copy of the current California Export List may be obtained from the SLA by phone at (415) 434-4900, or by fax to (415) 434-3716. WHEN TO FILE: This report must be filed by the surplus line broker within 60 days of placing the insurance with a nonadmitted insurer. (California Insurance Code Section 1763(a)) WHERE TO FILE: This Report must be submitted to The Surplus Line Association of California as designee for the California Insurance Commissioner. Mailing address is as follows: 50 California Street, 18th Floor, San Francisco CA 94111. LOWER RATE FILINGS: This Report may not be used to file a risk placed with a nonadmitted insurer when such insurance is procured at a lower rate of premium or lower premium than the lowest rate or premium available from an admitted insurer. Please contact the Department of Insurance or The Surplus Line Association of California for information regarding the procedures applicable to such lower rate filings. CODE TYPE OF INSURANCE CODE TYPE OF INSURANCE 050 051 100 101

150 151 200 201 300 350 351 400 401 402 403 404 414 450 500 501 502 510 550 551 600 606 650 651 652 653 655 700 701 702 703 800 980 990 994 996 997 998 999 Auto Liability Private Auto Liability Commercial

Auto Physical Damage Private Auto Physical Damage Commercial Crime Crime Kidnap & Ransom Combined Auto Liability & P.D. Private Combined Auto Liability & P.D. Comm. Excess Liability (Incl. Umbrella) Fidelity & Surety Bonds Bonds Fidelity & Surety Bonds Fidelity Fire Singe Family Dwelling Fire Commercial Fire Homeowners Fire Homeowners Multiple Peril Fire Farm Owners Multiple Peril Residential Earthquake Inland Marine General Liability Gen. Liability Pollution Legal Liability Gen. Liability Product Tampering Aviation Errors & Omissions All Others Errors & Omissions Dir. & Off. Malpractice All Other Malpractice Hospitals Miscellaneous Miscellaneous Glass Miscellaneous Boiler & Machinery Miscellaneous Nuclear Risks Miscellaneous Political Risks** Accident Accident Disability Income Accident Group Health Insurance Accident Individual Health Ins. Garage Liability Excess Workers Compensation Commercial Property All Risk Commercial Property Special Multi-Peril Commercial Property DIC*** Commercial Property Earthquake*** Commercial Property Terrorism Commercial Property Special Multi-Peril with Terrorism

Coverage in bold font are additions to the Confidential Report of Placement (rev. 01/97) and Diligent Search Report (rev. 3/95) coverage list. **Coverage is currently on Export List ***Coverage is currently on Export List under code 406 10 SL-2:Diligent Search Report Full name of licensee who performed or supervised diligent search Individual license number, or name of business entity and entitys license number Name of insured as stated on the policy declaration page Insured address Risk description, not type of coverage Physical location of risk, not P O Box Coverage or export code from instructions Only complete if your policy is for private passenger auto liability Only complete if your policy is for health insurance Only complete if the insurance is placed with a risk purchasing group How did you determine that at least three admitted carriers would not accept the risk? This form is available on the SLA website:

http ://www.slacal.org/docs/default-source/general-content-documents/Filing-Fo rms/sl2-printable.pdf?sfvrsn= 11 SL-2:Diligent Search Report (continued) Name of unlicensed person who performed the search under supervision If checked YES, please complete 7(B) If checked NO, skip to 8(A) If YES was checked in 8(A), please answer 8(c); if NO was checked, please answer 8(B) Signature of licensee named on line 1; electronic facsimile is acceptable Date of signature This form is available on the SLA website: http ://www.slacal.org/docs/default-source/general-content-documents/Filing-Fo rms/sl2-printable.pdf?sfvrsn= 12 SL-2 Instructions INSTRUCTIONS SECTION 1: Please provide the full name of the licensed individual who performed or supervised the diligent search. If the search was performed under the individuals license number, enter his/her license number in section (A) or if the individual was authorized as an endorsee under an organizational license, enter the name of the organization and its license number in

section (B). SECTION 6: Please provide a complete response on section (A). Note: The Insurance Commissioner or his designee may require the surplus line broker to conduct a further or additional search among admitted insurers for similar placements in the future. [California Insurance Code Section 1763(b)] An incomplete response may unnecessarily result in a request for a further search to be conducted. If the individual named on line 1 did not perform the diligent search, please provide the full name of the individual who performed the search on section (B). SECTION 7(B): To avoid mis-identification among insurers with similar names, please provide the complete name of the admitted insurer as listed in the CDI Official Publication of Admitted Companies. Insurer group names, such as Cigna Group, Chubb Group, California Ins. Group, Hartford Group, etc., are acceptable if the person performing the search verifies that the representative of the group, who declines the risk, does in fact represent an admitted insurer in the group that actually writes the particular type of insurance being sought. IMPORTANT: Persons who are licensed only as an agent may only submit a risk to admitted insurers that have appointed them as their agent. Agents are not authorized to offer a risk to admitted insurers for which they are not appointed agents. A search which is limited to only those companies that have appointed the agent may not necessarily constitute a diligent search of the admitted market. WHAT TO FILE: This report must be filed as an attachment to the Report of Placement. (CDI Form SL-1). WHERE TO FILE: The SL-1 and this report are to be filed by the surplus line broker with The Surplus Line Association of California within 60 days of placement of coverage with non-admitted insurer(s). MULTIPLE LICENSEES CONDUCTING SEARCH: If two or more licensees conduct a diligent search of admitted insurers, then each licensee must complete a diligent search report (CDI Form SL-2). All such reports should be attached to the SL-1. CODE TYPE OF INSURANCE 050 051 100 101 150 151 200 201 300 350 351 400 401 402 403 404 414 450 500 501 502

CODE TYPE OF INSURANCE Auto Liability-Private Auto Liability-Commercial Auto Physical Damage-Private Auto Physical Damage-Commercial Crime Crime-Kidnap & Ransom Combined Auto Liability & P.D.-Private Combined Auto Liability & P.D.-Comm. Excess Liability (Incl. Umbrella) Fidelity Surety & Bonds-Bonds Fidelity Surety & Bonds-Fidelity Fire-Single Family Dwelling, Duplex Fire-Commercial Fire-Homeowners Fire-Homeowners Multiple Peril Fire-Farm Owners Multiple Peril Residential Earthquake Inland Marine General Liability Gen. Liability-Pollution Legal Liability General Liability-Product Tampering 510 Aviation 550 Errors & Omissions-All Others 551 Errors & Omission-Directors & Officers 600 Malpractice-All Other 606 Malpractice-Hospitals 650 Miscellaneous 651 Miscellaneous-Glass 652 Miscellaneous-Boiler & Machinery 653 Miscellaneous-Nuclear Risks

655 Miscellaneous-Political Risks 700 Accident 701 Accident-Disability Income 702 Accident-Group Health Ins. 703 Accident-Ind. Health Ins. 800 Garage Liability 980 Excess Workers Compensation 990 Commercial Property-All Risk 994 Commercial Property-Special Multi-Peril 996 Commercial Property-DIC 997 Commercial Property-Earthquake 998 Commercial Property-Terrorism 999 Commercial Property-Special Multi-Peril w/Terrorism (This list does not include those coverages on the export list. An updated export coverage list is published every year by the California Dept. of Insurance.) SL-2 (Revised 06/2004) 13 Exceptions to Diligent Search There are two exceptions to the diligent search requirement: If the coverage is listed on the current California Export List or If the insured qualifies under AB315s definition of a commercial insured

14 Export List On January 1, 1996, Section 1763.1 regarding the Export list was added to the California Insurance Code. Placements with coverage on the Export List are exempt from a Diligent Search Report because a public hearing determined that there was not a reasonable or adequate insurance market among admitted insurers. The latest copy of the Export List is shown on the next page. If the coverage is not on the export list, then a Diligent Search Report must be completed. 15 16 17 Commercial Insured/ Exempt Commercial Purchaser The surplus line broker does not need to perform a diligent search if the insured qualifies as an Exempt Commercial Purchaser (California uses the term Commercial Insured) The surplus line broker procuring or placing the surplus line insurance must have disclosed in writing to the commercial insured that such insurance may or may not be available from the admitted market, which may provide greater protection with more regulatory oversight

The commercial insured must have subsequently requested in writing that the surplus line broker procure or place surplus insurance from a nonadmitted insurer. 18 CALIFORNIA COMMERCIAL INSURED/EXEMPT COMMERCIAL PURCHASER SAMPLE CHECKLIST Commercial Insured/Exempt Commercial Purchaser Qualifications Checklist Under the NRRA, the surplus line broker does not need to perform a diligent search if the insured qualifies as an Exempt Commercial Purchaser. To determine whether the insured meets the NRRA definiti on of an Exempt Commercial Purchaser, please review the following checklist. If the insured meets all three requirements, a diligent search does not need to be performed. Requirement 1: Employs or retains a qualified risk manager (refer to definit ion below) Requirement 2: Paid an aggregate nationwide property & casualty premium of at least $100,000 in the immediately preceding 12 months. Requirement 3: Meets one of the following: Possesses a net worth in excess of $20 million, or Generates annual revenues over $50 million, or Employs more than 500 full time employees per individual insured, or is a member of an affiliated g roup employing more than 1,000 employees in the aggregate, or Is a non-profit or public entity generating annual budget over $30 million, or Is a municipality with a population in excess of 50,000 persons. NRRA Qualified Ri sk Manager Definiti on Requirement 3: A bachelor's degree or higher from an accredited college or university in risk management, business administration, finan ce, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management; and three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance, or Holds one of the designations below: CPCU or ARM or CRM or RF or any other designation, certificat ion, of license determined by a State Insurance commissioner or other State regulatory officia l or entity to demonstrate minimum competence in risk management,

or Has seven years of experience in risk financing, cla ims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and any one of the following designations: CPCU or ARM or CRM or RF or any other designation, certific ation, or license determined by a State insurance commissioner or other State insurance regulatory official or entity to demonstrate minimum competence in risk management, or Under the NRRA, a Qualified Risk Manager must meet all three of the following requirements: Requirement 1: Must be an employee of, or a third party consultant retained by, a commercial policyholder, and Requirement 2: Provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance, and Has at least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance, or Has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management. 19 Submission Submit the documents to the SLA. The SLA currently accepts batches through: Mail through the USPS to: 12667 Alcosta Boulevard Suite 450 San Ramon, CA 94583 Upload through the SLIP Portal at www.slip.slacal.org 20

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