Under section 1780.56(a)(1) of the California Insurance Code, the SLA is responsible for notifying the filing surplus line broker of any errors, discrepancies, missing information, or any other problems detected in the filed documents. These notifications are referred to as "tag" letters. There are two main categories of tags: Standard Tags and Priority Tags.
Standard tags notify the broker of any errors, problems, discrepancies, or missing information in the filed documents. These deficiencies may be noted on the policy declaration page, cover note, binder, endorsements, or the SL-1 (Confidential Report of Placement) and SL-2 (Diligent Search Report) forms. The different types of standard tags are shown on the list below.
The SLA´s follow-up procedure on unresolved standard tags are as follows:
- Tags relating to late filings, invoice date, and/or deficiencies in the SL-1 and SL-2 forms remain outstanding in the SLA´s system for only 30 days. If these tags are not resolved within the 30 day time period, the tag is automatically unsuspensed and a report, organized by broker, listing all such unresolved violations is sent to the Commissioner.
- For all non SL-1 and SL-2 and other standard tags that remain outstanding after 30 days, the SLA generates another tag letter which is accompanied by a cover letter and/or telephone call reminding the filing broker of the outstanding tags. If the tag is not resolved within 90 days, the SLA provides the Commissioner with a report of the unresolved items, listed by broker.
SL-1 and SL-2 Standard Tags (30 Day Response Time)
- SL-1 Is Missing.
- SL-1 Form Was Incomplete.
- SL-2 Is Missing.
- SL-2 Form Was Incomplete.
- Section 6 Of The SL-2 Form Was Incomplete.
- Section 7(B) Of The SL-2 Form Was Incomplete.
- Admitted Company Names Are Incomplete On SL-2 Form.
- Admitted Company Names On SL-2 Not Listed In Admitted Book.
- Listed Admitted Insurers On SL-2 Not Licensed To Write Business.
- SL-1/SL-2 Forms Required For Endorsements Extending The Policy Term.
- SL-1/SL-2 Forms Are Not Legible.
- Late Policy Filing (Submitted With No Explanation).
- Invoice Date.
Policy/Certificate/Binder/Endorsement Standard Tags (90 Day Response Time)
- Policy/Certificate Number Is Missing.
- Policy/Certificate Term of Coverage Is Missing.
- Incomplete Policy or Binder.
- Name Of Insured Is Not Shown or Is Not Legible.
- Taxes Are Not Shown on or In Policy/Certificate.
- Premium is Not Broken Down According To Coverage.
- Renewal has No Record Of Previous Policy Filed.
- Risk Purchasing Group Name Is Not Shown.
- Risk Purchasing Group Name Is Not on List Under Company.
- Endorsement Has No Record of Policy Being Filed.
- Endorsement Date does not Fall Within Policy Term.
- Cancellation Endorsement Effective Date Is Missing.
- Endorsement Does Not Show Tax.
- No Specific Tag Wording. Must Be Typed Manually.
- Revised Coversheet.
SL-1 and SL-2 Informational Tags (No Response Required)
- Incorrect SL-1 Form Submitted.
- Incorrect SL-2 Form Submitted.
- Incorrect SL-1 and SL-2 Forms Submitted.
- SL-1 Form with Original Signature.
- SL-2 Form with Original Signature.
- Late Policy Filing Submitted with an Explanation.
Priority tags notify the filing broker of defects in their filings that the Commissioner considers more serious than standard tag items, such as the acceptability of the surplus line insurer with which the insurance was placed. These tags are issued because of a violation of a California statute or regulation.
The SLA´s procedure for follow-up on unresolved priority tags are as follows:
- If a priority tag is not answered in 14 days, another copy of the tag letter is sent reminding the broker of the outstanding tag.
- If the priority tag is still not answered by the 28th day, a report
listing the type of unresolved violation(s) by the broker is submitted
to the Commissioner´s office.
Priority Tags (28 Day Response Time)
- C.A.A.R.P. Declination Is Missing.
- Non-U.S. Insurer Not Meeting Eligibility.
- Insurer With A Merged Status.
- Insurer Not In Compliance with GAP.
- Objected Company.
- Security Information Is Not Provided.
- Security List Does Not Show Group Breakdown.
- Lloyd´s Syndicate Numbers Not Shown.
- Security Company Share of Risk Does Not Equal Share on Cover Note.
- Security Agreement Is Not Broken Down By Coverage.
- Lower Rate Filing.