3.3 Policy Fees: Surplus Lines Agent, Retail Agent & Insurer Fees
Key Takeaways
A filing surplus lines agent may charge a reasonable per-policy fee that must be itemized before purchase and enumerated in the policy (s. 626.916(2)).
A retail agent may charge a reasonable per-policy fee for placing a surplus lines policy if it is itemized separately before purchase (s. 626.916(3)).
The surplus lines agent's per-policy fee is specifically included in taxable premium under s. 626.932(6).
Per FSLSO guidance, the retail agent's per-policy fee is not part of taxable surplus lines premium.
Outline item I.C.1 is policy fees. Section 626.916(2) and (3) authorize two different per-policy fees, and how each is treated for tax is a favorite exam topic. Fees also connect to the definition of premium in s. 626.932(6) and to the illegal-dealings rule in s. 626.9541(1)(o).
The Two Statutory Fees
| Feature | Surplus lines agent's per-policy fee (s. 626.916(2)) | Retail agent's per-policy fee (s. 626.916(3)) |
|---|---|---|
| Who may charge | The filing surplus lines agent | The retail agent who places the surplus lines policy |
| Standard | Reasonable, per policy certified for export | Reasonable, per policy |
| Disclosure before purchase | Itemized separately to the customer | Itemized separately to the customer |
| Shown in the policy | Must be enumerated in the policy | Not required by the statute |
| Part of taxable premium? | Yes, specifically included in "premium" (s. 626.932(6)) | No, per FSLSO guidance it is not within taxable premium |
The statute sets no fixed dollar cap on either fee. The standard is that the fee must be reasonable. The fee is also disclosed in the unlisted-insurer notation in s. 626.918(5), which warns that the insured may be charged a reasonable per-policy fee under s. 626.916(2).
Insurer-Imposed Fees
Insurers may also charge policy, inspection, survey, or membership fees. The FSLSO notes there is no statutory limit on fees imposed by a surplus lines insurer, but such a fee must be charged in consideration for the insurance contract, remitted to the insurer, and not retained by the agent or managing general agent. Because s. 626.932(6) defines premium to include any policy, survey, inspection, service, membership, or similar fee charged in consideration for the contract, insurer fees are taxable premium.
Why the Fees Are Legal: s. 626.9541(1)(o)
Collecting more than the premium specified in the policy and fixed by the insurer can be an unfair trade practice. The statute expressly allows surplus lines agents to collect applicable state and federal taxes and fees authorized by s. 626.916(2) in addition to the insurer's premium. A fee that is not authorized, is not itemized, or is disguised as premium invites a charge of illegal dealings in premiums.
Worked Example: Building the Invoice
A commercial property policy is placed through a retail agent and a wholesale surplus lines agent, effective August 1, 2026.
| Line | Amount | Taxable premium? |
|---|---|---|
| Insurer premium | $8,000.00 | Yes |
| Insurer inspection fee | $250.00 | Yes, a fee in consideration for the contract |
| Surplus lines agent's policy fee (s. 626.916(2)) | $150.00 | Yes, specifically included |
| Retail agent's policy fee (s. 626.916(3)) | $100.00 | No |
- Taxable premium = $8,000 + $250 + $150 = $8,400.00
- Surplus lines tax at 4.94% = $8,400 x 0.0494 = $414.96
- FSLSO service fee at 0.03%, for a policy effective on or after July 1, 2026 = $8,400 x 0.0003 = $2.52
- EMPA surcharge on a commercial property policy = $4.00
- Retail agent's fee = $100.00
Total paid by the insured = $8,400.00 + $414.96 + $2.52 + $4.00 + $100.00 = $8,921.48
Notice that the service fee is computed on premium, and premium includes the surplus lines agent's policy fee (s. 626.9325(6)). The service fee itself is excluded from premium for tax purposes (s. 626.932(6)).
Who Keeps Each Fee
| Fee | Charged by | Kept by | Reported to the FSLSO as premium? |
|---|---|---|---|
| Insurer policy, inspection, or survey fee | Insurer | Insurer; the agent or MGA must remit it | Yes |
| s. 626.916(2) per-policy fee | Filing surplus lines agent | Surplus lines agent | Yes |
| s. 626.916(3) per-policy fee | Retail agent | Retail agent | No |
A Second Example: Policy Effective Before July 1, 2026
A general liability policy effective May 1, 2026 has a $4,000 insurer premium and a $100 surplus lines agent fee.
- Taxable premium = $4,100
- Tax at 4.94% = $4,100 x 0.0494 = $202.54
- Service fee at the 0.06% rate that applied to policies effective before July 1, 2026 = $4,100 x 0.0006 = $2.46
The only difference from the August 2026 example is the service fee rate, which follows the policy's effective date.
Compliance Checklist for Fees
- Is the fee authorized, meaning it is the filing surplus lines agent's fee, the retail agent's fee, or a fee the insurer charges for the contract?
- Was it itemized separately to the customer before purchase?
- If it is the surplus lines agent's fee, is it enumerated in the policy?
- Was it reported to the FSLSO and taxed as premium where required?
- Is it reasonable?
Common Mistakes
- Treating the retail agent's fee as taxable premium. It is not.
- Leaving the surplus lines agent's fee off the tax base. It is premium.
- Computing tax on the service fee. The service fee is excluded from premium.
- Assuming the fee must be buried in premium. Both statutory fees must be itemized separately before purchase.
Which per-policy fee must be enumerated in the surplus lines policy itself?
The fee charged by the retail agent under s. 626.916(3)
The FSLSO service fee
The Emergency Management, Preparedness, and Assistance surcharge
The fee charged by the filing surplus lines agent under s. 626.916(2)
A policy has a $20,000 insurer premium, a $200 surplus lines agent policy fee, and a $150 retail agent fee. What is the taxable premium for the 4.94% surplus lines tax?
$20,200
$20,000
$20,350
$20,150
Why may a surplus lines agent collect the surplus lines tax and an authorized per-policy fee in addition to the insurer's premium without committing illegal dealings in premiums?
Surplus lines agents are exempt from all unfair trade practice laws
The insured waives the trade-practice rules by signing the disclosure
Section 626.9541(1)(o) expressly allows surplus lines agents to collect applicable taxes and fees authorized by s. 626.916(2)
Fees under 5% of premium are never considered a charge for insurance
Sections you finish are checked off in the contents.