SURPLUS LINES FAQ - Delaware Insurance Commissioner

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46. If a surplus lines broker contacts a wholesale SL broker to obtain coverage, does the wholesale SL broker need to be licensed in DE? Who is responsible for making the filings with the State? It depends on contract terms. Most of the time it is the broker who actually transacts business with the insurance company that is responsible for making the filings with the state. And Delaware law requires any insurance producer who transacts business with a nonadmitted company to be specially licensed for surplus lines. However, if a wholesale broker is under contract with a nonadmitted insurer, and if the contract includes underwriting and claims handling authority in addition to binding authority, then the Department considers that wholesale broker to be acting as the insurer, not the SL broker, in the transaction. In that case the wholesale broker would not need to be licensed and the “original” SL broker must be licensed in Delaware and is responsible for the filings as if they had contacted the company directly. This is especially true if the wholesale broker is registered in Delaware as an MGA. 47. Who should file the SL-1905? This form is used by the broker who procures the coverage from the non-admitted insurer whenever there are surplus lines business transactions to report. It can be used to report as many policies as needed on this one electronic form. It is in Excel format and should be sent as an Excel file attached to an email. Do not send this as a paper filing or an email attachment in PDF format 48. I am trying to complete the SL-1905 electronic form but the drop downs don’t work. Should I just print the form and enter it manually? DO NOT print the SL-1905 form unless you plan to keep a copy in your files. It must be sent as an Excel file. I suspect the problem is the Macro Security setting in Excel. The remedy is quite simple and you are not the first person to have this problem. Here's what you need to do: Open Excel. On the main toolbar select Tools. Select Options. From the Options screen select the Security tab. On the Security screen click the Macro Security button (lower right). Set the macro security setting to medium -- where you can choose to enable or disable macros. Click apply and OK and close out. Now when you open the SL-1905 you will get a pop up screen and be asked if you want to enable or disable macros. Click the button to ENABLE MACROS. Everything should now work properly. 49. I cannot insert a signature on the SL-1905. Should I print it and send a signed copy? You do not have to send it with a signature.
The check boxes serve as electronic signatures. The only time you need to print and manually sign this form is if you keep a paper copy in your file or if you give it to the insured as proof of insurance. But all that needs to be submitted to the Department is the Excel file with the boxes checked. 50. Should I attach the SLB-A1 or the SLB-C1 to the quarterly tax reports? Do not use the SLB-A1 or the SLB-C1 at all. These forms are no longer in use. Nothing (except payment if applicable) should be attached to the tax reports. 51. If there is a premium bearing endorsement, should I use the SL-1905 form to show the changes to the original policy? Yes, another SL-1905 is needed. It will give all the information needed to associate the endorsement with the original policy. 52. We are trying to fill out the SL-1905 Form and are having trouble with the NAIC Code and description of coverage since our policies are blanket policies. What are we supposed to put in this field? Since premium is not charged on Master Policies, how do we fill this form in correctly? Report the policy within 30 days of the effective date with zero premiums. Please make a note that it is a master policy. Then submit additional SL-1905 forms showing premium bearing changes to the master policy as they occur. You may use “Other” for the NAIC code and manually enter a brief description in the Description of Coverage field. 53. What are NAIC codes as shown on the SL-1905 – what do they mean? These are the codes used in insurance company financial statements to identify lines of business. The codes are used in compliance with NAIC (National Assn. of Insurance Commissioners) standards. The data from this field on the SL-1905 helps the Department when it calculates the amount of funding the volunteer fire departments will receive. 54. Is there wording that must be stamped on the policy? What is the wording? Yes, Delaware law (§1909) is very specific regarding this requirement: “Every insurance contract procured and delivered as surplus lines coverage pursuant to this law shall have stamped upon it, initialed by or bearing the name of the surplus line broker who procured it, the following: ‘This insurance contract is issued pursuant to the Delaware Insurance Laws by an insurer neither licensed by nor under the jurisdiction of the Delaware Insurance Department.’” 55. Does Delaware have a stamping office or a stamping fee? No, Delaware does not have a Stamping Office and does not charge a stamping fee at this time.
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Page 13: Check with the underwriter. If it i

SURPLUS LINES FAQ - Delaware Insurance Commissioner

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