FAQ - General Questions

Q. What types of coverage may be considered surplus line?

A. Coverage may be considered surplus line if insurance cannot be procured from insurers, admitted for the particular class or classes of insurance and that actually write the particular type of insurance in this state.

Q. What controls exist on rates?

A. The premium charged should not be less than the lowest rate which would be accepted by any admitted insurer for insuring the particular risk. Refer to CIC Section 1763.

Q. What is the amount of gross premium a surplus line broker should report if premiums are billed and payable in installments?

A. The amount of gross premium a surplus line broker must report if premiums are billed and payable in installments shall be the amount of the installment premium, provided the amount and due date of each installment, or the basis for determining each installment, is identifiable in the policy or an endorsement. Refer to the additional conditions as outlined in CIC Section 1774(d).

Q. What is the provision for service of suit?

A. A surplus line insurer may be sued upon any cause of action arising in this state under any surplus line insurance contract made by it, or any evidence of insurance issued or delivered by the surplus line broker, pursuant to the procedures set forth in CIC Sections 1610 to 1620. Any policy or evidence of insurance issued by the surplus line insurer or the surplus line broker shall contain a provision stating the substance of this section of the Insurance Code, and designating the person to whom the Commissioner shall mail process. Refer to CIC Section 1772.

Q. What is the Export List?

A. The Export List is a list of coverages, classes of business, and types of risk that can be exported to the surplus line market without the agent, broker or surplus line broker having to conduct a diligent search of the admitted market. If risk meets the Export List requirements a Diligent Search Report (SL-2) form is not required.

Q. What are the SIC codes and where can they be found?

A. The Standard Industrial Classification (SIC) codes classify establishments by the type of business they are primarily engaged in. The SIC codes are found in the Standard Industrial Classification Manual. This manual classified a variety of economic activities. The contents are categorized into eleven divisions: agriculture, mining, construction, etc. Each division is subdivided into major groups, with a more detailed description of the activity.

Q. When did the SLA begin utilizing SIC codes and for what purpose?

A. Effective 1/1/96 the SLA began assigning the SIC codes to all new and renewal policies. The purpose for the collection of this data by the SLA was to provide legislators with a more accurate scope of the broad range of businesses that utilize the surplus line market.