Surplus Line Broker Requirements - (Individuals)

Definition

An individual, corporation, partnership or other business entity required to be licensed under the laws of this state to procure certain insurance coverages, called surplus lines, that cannot be procured from authorized insurers.

Qualifications

Qualifications necessary in order to become a surplus line broker include, but are not limited to:

Resident: Any person who is licensed as a resident producer for the property and casualty lines of authority, and who is deemed to have had sufficient experience in the insurance business may be licensed as a surplus line broker. Regulation 36 requires a high school diploma and 3 years of recent full-time experience in the property and casualty field.
Non-Resident: Any person who is licensed in their home state as a surplus line broker may be licensed in Alabama as a surplus line broker if the applicant's home state awards non-resident licenses to residents of this state on the same basis.

Initial Licensing Process

• Applicant must apply online and bond form AL-SLB-13 must be completed and original mailed to ALDOI.
• Alabama residents must execute and attach a bond in the amount of $50,000. (Form AL-SLB-13)
• Non-residents are exempt from the bond requirement.
• APPLY ONLINE - www.nipr.com
• Bond (if applicable) should be sent to:

  Alabama Department of Insurance
  P O Box 303351
  Montgomery, AL 36130-3351

Suspension or Revocation

A surplus line broker's license may be revoked if the broker fails to file their annual statement, remit the annual tax required by law, maintain the appropriate bond, keep records of transactions under the license, or allow examination of licensee, or any cause for which a producer license may be revoked. The Commissioner may suspend or revoke the surplus line broker's license if he finds that the broker has, willfully or without exercise of due care, placed any insurance coverage with an unauthorized (non-admitted) insurer in violation of any of the Alabama code requirements.

Requirements

• If certain insurance coverage cannot be procured on terms acceptable to the insureds from authorized insurers, such coverages, designated "surplus lines", may be procured from unauthorized insurers.
• The insurance must be procured through a licensed surplus line broker.
• The full amount of insurance required must not be procurable, after diligent effort, from among the insurers authorized to transact that kind and class of insurance.
• The insurance must not be procured for the purpose of securing the advantage of a lower premium rate than would be accepted by authorized insurers.
• Within 30 days of the effective date of the insurance policy, the surplus line broker shall file a written report (Form ID-12) validating that coverage was written through the unauthorized market.

Forms

• Surplus Line Broker Bond - Form AL-SLB-13
• Surplus Line Law
• Regulation No. 36

Surplus Line Broker Renewal Process

Surplus Line Broker licenses are continuous subject to payment of a $200.00 annual renewal fee. No continuing education is required for license renewal. Renewal licenses can be printed one time free.

FOR LICENSES PREVIOUSLY RENEWED OR NEWLY ISSUED BEFORE OCTOBER 1:

• On or about October 1 of each year, a renewal notice is sent to all surplus line brokers subject to renewal.
• Renewal process must be completed online by December 31.
• Surplus Line Broker licenses expire on December 31 if not renewed online.
• If your license expires, you must reapply online at www.nipr.com.

FOR LICENSES NEWLY ISSUED BETWEEN OCTOBER 1 AND NOVEMBER 30:

• On or about January 1 of each year, a supplemental renewal notice is sent to all surplus line brokers subject to renewal.
• Renewal process must be completed online prior to February 15.
• Surplus Line Broker licenses expire on December 31 if renewal process is not completed by February 15.
• If your license expires, you must reapply online.