3.1 Eligibility for Export: Rate, Form & Deductible Conditions

An eligible insurer is only half of a lawful placement. The coverage itself must also be eligible for export. Section 626.916 sets the conditions for ordinary risks. Section 626.917 provides a separate, simpler track for wet marine, transportation, and aviation risks. The exam tests the wording of these conditions closely, especially the difference between "a majority of authorized insurers" and "one or more authorized insurers."

The Premise: s. 626.915

Surplus lines coverage exists for insurance that cannot be procured from authorized insurers. Section 626.916 turns that premise into conditions designed to keep unauthorized insurers from undercutting the admitted market on price or breadth of coverage. This mirrors the purpose stated in s. 626.913.

The Four Export Conditions: s. 626.916(1)

Coverage is not eligible for export unless all of the following are met.

(a) Rate floor

The premium rate may not be lower than the rate, if any, in actual and current use by a majority of the authorized insurers for the same coverage on a similar risk. Surplus lines is not a discount market. If a majority of admitted carriers write a comparable risk at a given rate, the surplus lines rate may be higher but not lower.

(b) Form ceiling

The policy form may not be more favorable to the insured, as to coverage or rate, than similar contracts on file and in actual current use in Florida by the majority of authorized insurers writing similar coverage on similar risks.

The exception is a unique form:

• a policy form designed for a particular subject of insurance may be used if the surplus lines agent files a copy with the office;
• the office may disapprove it within 10 days of filing, excluding Saturdays, Sundays, and legal holidays;
• the grounds for disapproval are that the special form is not reasonably necessary for the principal purposes of the coverage, or that its use would defeat the Surplus Lines Law's purpose of reasonably protecting authorized insurers from unwarranted competition.

(c) Deductibles

Except for extended coverage written with fire insurance and except for windstorm insurance, the exported policy may not provide deductibles other than those available under similar policies in actual and current use by one or more authorized insurers. Windstorm deductibles are therefore unrestricted by this condition, which is one reason s. 626.9374 requires prominent hurricane-deductible notices on residential surplus lines policies.

(d) Insured disclosure

The insured must sign, or otherwise provide documented acknowledgment of, the statutory disclosure. Section 3.2 covers this condition and the 2025 legislation that made it the centerpiece of export compliance.

Wet Marine, Transportation & Aviation: s. 626.917

Insurance of wet marine and transportation risks, as defined in s. 624.607(2), and aviation risks, including incidental airport and products liability and hangarkeeper's liability, may be exported under just two conditions:

1. the insurance is placed only by or through a licensed Florida surplus lines agent; and
2. the insurer has been made eligible by the office specifically for such coverages, based on information showing it is well able to meet its financial obligations.

The s. 626.918 capital conditions do not apply to insurers made eligible this way (s. 626.918(2)(f)).

Pleasure-use exclusion: s. 626.917 does not apply to boats or aircraft used solely for personal pleasure, family use, or transporting the insured's executives, employees, and guests. A private yacht or a corporate jet therefore goes through the ordinary s. 626.916 track.

Tax consequence

Section 626.932(4) exempts insurance of vessels, cargo, or aircraft written under s. 626.917 from the surplus lines tax. The exemption does not cover the service fee, which s. 626.9325(4) waives only for government risks. The FSLSO confirms that pleasure boats and aircraft are taxable because they fall outside s. 626.917.

Applying the Conditions

Scenario 1: rate. Most admitted insurers write a certain restaurant liability class at a manual rate. A surplus lines underwriter offers 15% below that rate to win the account. The coverage is not eligible for export, because the rate is lower than the majority rate.

Scenario 2: deductible. A surplus lines contractor's liability policy uses a $250,000 per-claim deductible that no admitted insurer offers. The policy fails condition (c). If at least one authorized insurer offers a comparable deductible, it passes. A 5% named-storm deductible on a coastal building is permitted because windstorm is carved out.

Scenario 3: unique form. A surplus lines agent wants to use a specialized form for a drone-inspection operation. The agent files the form with the office. If the office has not disapproved it within 10 business days (excluding weekends and legal holidays), the agent may use it.

Scenario 4: marine. A cargo policy for an importer is placed with an insurer made eligible under s. 626.917 through a licensed surplus lines agent. It is exportable and exempt from the 4.94% tax, although it is still filed with the FSLSO. A family's pleasure yacht is not a s. 626.917 risk, so it must satisfy s. 626.916 and is taxable.