Broker Filing Procedures

A master policy is a single contract issued to a group, such as an employer, association, or other entity, and filed on a group basis. This type of coverage is usually issued for an indefinite term, so there is no expiration date. Group members receive certificates, as evidence of membership, which summarize provided benefits. Group members are generally treated as third party beneficiaries of the master policy.

If the master policy is filed with a master policy number and one group name, SL-1 and SL-2 forms are required on the inception date of the master policy. New SL-1 and SL-2 forms would be required on the anniversary of the inception date. If the individual insured is being filed separately under the certificate name and number, it would be treated as individual policies and SL-1 and SL-2 forms would be required for each one.

For Lloyd's placements effective 1/1/97 and after, the surplus line broker must identify syndicates used on all new and renewal policies, and extension endorsements. Each policy must include the individual syndicate numbers and the percentage of participation for each syndicate. These syndicates must be on the IID List.

Policy certificates, as well as SL-1 and SL-2 forms received by the SLA more than 60 days after insurance is placed with a surplus line insurer constitute late filings. SL-2 forms are not required if the type of coverage or risk meets the Export List requirements.

Each month the surplus line broker will receive a billing statement. This statement is called a Policy Detail Activity Report. This report includes: a detailed listing of all the filings processed within that month, the premiums and stamping fees for each item, an invoice with stamping fees due for that month, and information about any prior month with an outstanding balance.

Risk Purchasing Group placements are not treated any differently from other surplus line placements. A licensed California surplus line broker (either resident or non-resident) must be involved in the transaction, and a copy of the policy with SL-1 and SL-2 forms must be filed with the SLA. The SL-2 form is not required if the type of coverage or risk meets the Export List requirements.

Digital signatures authorized by a digital signature certification authority are acceptable.

As noted on the California Secretary of State’s website, a digital signature is defined as “an electronic identifier, created by computer, intended by the party using it to have the same force and effect as the use of a manual signature.”

Digital signatures must be:

1. Specific to the person using it.
2. Verifiable.
3. Under the exclusive control of the person using it.
4. Linked to data so that if information on a signed form are changed, the digital signature becomes invalid.
5. Conforms to all other regulations adopted by the Secretary of State, as found on their website: https://www.sos.ca.gov/business-programs/business-entities/faqs/#top.

Examples: