5.2 Evidence of Insurance & Required Policy Stamps (ss. 626.922, 626.924)

Outline item II.B.1, Records of Surplus Lines Agent: Content, cites ss. 626.922, 626.924, and 626.930. This section covers the first two: what the insured must receive as evidence of insurance, and what must be printed or stamped on it. Section 5.3 covers the agent's retained records.

Evidence of Insurance: s. 626.922(1)

Upon placing coverage, the surplus lines agent must promptly issue and deliver to the insured evidence of the insurance. That evidence is either:

• the policy as issued by the insurer, or
• if the policy is not yet available, a certificate, cover note, or other confirmation of insurance.

The document must be executed or countersigned by the surplus lines agent and must show:

Delegating issuance to the producing agent

A surplus lines agent may not delegate the duty to issue these documents to a producing general lines agent without prior written authority from the surplus lines insurer. A general lines agent may issue them only with prior written authority from the surplus lines agent. Everyone keeps paper:

• the surplus lines agent keeps copies of the insurer's authorization and of its delegation to the producing agent;
• the producing agent keeps copies of the written delegation and of every evidence of coverage it issues or delivers; and
• any evidence issued by a producing agent must include the name and address of the authorizing surplus lines agent.

No Evidence Without Authority: s. 626.922(2)

A surplus lines agent may not issue evidence, or represent that coverage will be or has been granted by an unauthorized insurer, unless the agent has:

1. prior written authority from the insurer for the insurance;
2. information from the insurer, received in the regular course of business, that the insurance has been granted; or
3. a policy actually issued by the insurer and delivered to the insured.

Changes After Delivery: s. 626.922(3)

If, after delivery, the identity of the insurers changes, the proportion of the risk assumed by an insurer changes, or the coverage changes in any other material respect, the agent must promptly deliver a substitute certificate, cover note, or confirmation, or an endorsement, showing the current status and the responsible insurers. The change may not produce a contract that would have violated the Surplus Lines Law if originally issued that way.

Delivery Deadline and Penalty: s. 626.922(4) and (5)

• A copy of the policy, cover note, or confirmation must be delivered to the insured within 60 days after coverage is effectuated.
• An agent who knowingly or negligently issues a false certificate, cover note, confirmation, or endorsement, or who fails to promptly notify the insured of a material change, is subject on conviction to the penalties in s. 624.15, or any greater penalty provided by law.

Required Information and Stamps: s. 626.924

Agent identification and the guaranty-act stamp: s. 626.924(1)

Each surplus lines agent through whom coverage is procured must write or print on the outside of the policy and on any certificate, cover note, or confirmation:

• the surplus lines agent's name, address, and identification number; and
• the name and address of the producing agent through whom the business originated.

The agent must also have stamped or written on the first page of the policy, certificate, cover note, or confirmation:

THIS INSURANCE IS ISSUED PURSUANT TO THE FLORIDA SURPLUS LINES LAW. PERSONS INSURED BY SURPLUS LINES CARRIERS DO NOT HAVE THE PROTECTION OF THE FLORIDA INSURANCE GUARANTY ACT TO THE EXTENT OF ANY RIGHT OF RECOVERY FOR THE OBLIGATION OF AN INSOLVENT UNLICENSED INSURER.

The rates-and-forms stamp: s. 626.924(2)

Surplus lines policies issued on or after October 1, 2009 must have stamped or printed on the face of the policy, in at least 14-point boldface type:

SURPLUS LINES INSURERS' POLICY RATES AND FORMS ARE NOT APPROVED BY ANY FLORIDA REGULATORY AGENCY.

FSLSO practice

The FSLSO publishes a sample face page containing all the required information. Its guidance says a face page is required for new and renewal policies, but not for endorsements or cancellations, as long as the financial information (premium, tax, fees, and any assessments) is disclosed.

Putting It Together