Surplus Lines

Regulation of Surplus Lines

Regulation of Surplus Lines

Another function of the Property and Casualty Division is the regulation of Surplus Lines. This includes monitoring Form F submissions and collection of premium taxes in compliance with applicable statutes.

Placing Surplus Lines Business

Placing Surplus Lines Business

Procedures for Placing Surplus Lines Business

NORTH CAROLINA INSTRUCTIONS AND REQUIREMENTS FOR OBTAINING A LICENSE TO REPRESENT A SURPLUS LINES COMPANY AND THE PROCEDURE TO BE USED FOR PLACING BUSINESS

Under the provisions of Article 21 of Chapter 58 of the General Statutes of North Carolina, a license may be obtained from the North Carolina Department of Insurance to place or procure policies of insurance on risks resident, located or to be performed in North Carolina from surplus lines insurers. As a condition precedent to the placement of such insurance, the surplus lines licensee must conduct a diligent search among insurers that are admitted to transact and are actually writing that particular kind and class of insurance in North Carolina.  In addition, the licensee must comply with the following requirements:

  1. Complete and submit to the Agent Services Division of the North Carolina Department of Insurance "Application for License to Represent a Surplus Lines Insurer." The application is available online at www.nipr.com.
  2. Pay the annual license fee of $50.00 and the processing fee of $44.00.
  3. Keep a record of all business placed with such surplus lines insurers in accordance with General Statute 58-21-75.
  4. Stamp or write in contrasting color and 12-point type or in 12-point type and underlined and in bold print on the first page and on the filing face of the policy so issued the words: The insurance company with which this coverage has been placed is not licensed by the State of North Carolina and is not subject to its supervision. In the event of the insolvency of the insurance company, losses under this policy will not be paid by any State insurance guaranty or solvency fund."

As a result of the passage of House Bill 262, effective January 1, 2017, the North Carolina Surplus Lines Stamping Office (NC Stamping Office) will commence processing surplus lines premium tax transactions for all surplus lines licensees (resident and nonresident) with the exception of Risk Purchasing Groups and Independent Procurement. Surplus lines premium taxes for Risk Purchasing Groups and Independent Procurement will continue to be filed directly with NCDOI.  Both resident and nonresident individual surplus lines licensees are required to be active members of the North Carolina Surplus Lines Association (NCSLA) pursuant to NC General Statute 58-21-40(d). NCSLA membership information can be obtained at www.ncsla.com.

  • Any licensee who does not comply with the requirements of the statute will be subject to having their NC license cancelled and will be denied access to the tax filing system.
  • Once the licensee has received an NC Surplus Lines License and joined the NCSLA, they will be able to go online at www.ncsla.com and register to receive a login and password for the SLIP tax filing system. The NCSLA will notify the licensee, or their representative, of their credentials as soon as their license and membership in the NCSLA have been verified.
  • Beginning on January 1, 2017, all new and renewal policies with an effective date beginning on or after 01/01/2017, and endorsements on these policies, must be filed using the NCSLA SLIP system. The only exceptions are “Risk Purchasing Groups” and “Independent Procurement policies” which will be handled by the NC Department of Insurance as they have been in the past.
  • Effective January 1, 2017 the North Carolina Form F will be replaced by an online “Compliance Acknowledgement” which verifies that the surplus lines licensee has complied with all requirements of the Surplus Lines Act (Article 21 of Chapter 58 of the NC General Statutes). Licensees will no longer be required to obtain a signed Form F from the insured and the producing broker. All inquiries concerning the NC Stamping Office, including the stamping fee, should be directed to the NCSLA via email at contact@ncsla.com or its previously referenced website. Please be aware that all premium changes (endorsements for cancellation, additional premiums, etc.) on business with policy effective dates prior to January 1, 2017 will continue to be processed by NCDOI as under current procedures. Any transactions on 2016 business that result in an additional premium and a surplus lines premium tax due will continue to be billed under current procedures.
  • The NC Stamping office will charge a 0.4% Stamping Fee on all new policies and renewals with an effective date following 01/01/2017, and endorsements on these filings.

Please be aware that all premium changes (endorsements for cancellation, additional premiums, etc.) on business with policy effective dates prior to January 1, 2017 will continue to be processed by NCDOI as under current procedures. Any transactions on 2016 business that result in an additional premium and a surplus lines premium tax due will continue to be billed under current procedures. The NC Form F will still apply to all 2016 policies that are filed in 2017.

All inquiries concerning the NC Stamping Office, including the stamping fee, should be directed to the NCSLA via email at contact@ncsla.com or its previously referenced website.

NCSLA
8412 Falls of Neuse Rd, Suite 206
Raleigh, N.C. 27615
919-746-8415

Multiple Year Policies

  • Any renewal of a Multiple Year policy that was written prior to 2017, and the taxes have been paid annually, will be treated as a new policy and filed as such in the SLIP system in 2017.
  • Any Multiple Year policy that has an effective date leading up to 12/31/2016, and the entire premium was paid in advance, will be handled under the current filing procedures and will not be subject to the SLIP system until the policy is renewed.
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