1. What is Surplus Lines?
Surplus Lines is defined as specialized property or liability coverage provided by a nonadmitted insurer in cases where the coverage is not available in the regular market through an admitted insurer. This insurance is only written through specially trained and licensed surplus lines brokers.
2. What is the difference between admitted companies and nonadmitted companies?
Admitted or authorized companies hold a Certificate of Authority issued by the Commissioner showing that they are duly authorized to transact insurance business in this state. By becoming authorized in Delaware, these companies place themselves under the jurisdiction of the Delaware Insurance Commissioner, and are regulated by the Delaware Insurance Department. Most insurance coverage is placed through admitted insurers.
Nonadmitted or unauthorized companies do not have a certificate of authority, but are deemed eligible to provide certain types of coverage if approved by the Department. Surplus Lines companies are not under the jurisdiction of the Delaware Insurance Commissioner, and though the Department monitors these companies, it is to a much lesser extent than the regulation of admitted companies. The regulation of surplus lines is largely accomplished by placing a number of requirements on the surplus lines brokers rather than the companies.
3. What special requirements are placed on surplus lines brokers?
- Licensing: The Department requires that both individuals and business entities (agencies, brokerages, firms, etc.) be specially licensed for surplus lines. A SL broker must be an insurance producer, licensed for general lines of authority, who also obtains a SL license that allows him or her to sell, solicit or negotiate contracts of insurance with eligible nonadmitted surplus lines insurers.
- Diligent Effort: Before placing any coverage with a nonadmitted insurer, the individual that represents the insured – usually the Producer but can be the SLB – must first seek the desired coverage from among admitted insurers who are writing comparable coverage in Delaware.
- Inquiry into Financial condition of Insurer: Although the SLB is required to place business only with insurers on the Eligible SL Insurers list, the Commissioner is not required to determine the actual financial condition or claims practices of any unauthorized insurer on the list. Every SLB should make a thorough inquiry into the financial condition and operating history of the SL insurer before placing business with the company.
- Disclosure to Insured: Whenever a SL transaction takes place, the SLB must stamp (or print) the insurance contract with the wording specified in §1909. The stamp must also bear the name of the SL broker who procured the coverage.
- Collect and Remit Taxes: Each SLB acts in a fiduciary capacity when handling the premium payments the policyholders entrust to him or her. That premium includes the 2% tax on insurance premiums.
- Make Filings to the Department and Maintain Records: The Insurance Commissioner regulates the SL market through the requirements placed on SL brokers. It is vitally important that SL brokers and their staff submit the required information to the Department both accurately and efficiently. Every SL broker must maintain in their office a full and complete record of each surplus line policy procured by him or her, and §1915 details the types of information that must be kept in those records. According to 6 Del. C., §12A-112, records may be kept in electronic format. The records must be open to examination by the Commissioner at any time for 5 years after issuance of the policies to which they relate.
4. Is there a handbook that explains all the special requirements placed on SL brokers?
Yes. In 2006 the Department prepared and published the SL Brokers’ Procedures Manual. The Manual was developed to assist resident and non-resident Delaware Surplus Lines licensees and compliance personnel with understanding the procedures that must be followed for compliance with the Delaware Surplus Lines Insurance Law. The Manual is in PDF format and can be searched electronically. It is available on the Department’s website.
5. Does Delaware require “due diligence”?
Yes. Surplus lines insurance may be procured by SL brokers from non-admitted insurers only “…after diligent effort has been made to do so, from among the insurers authorized to transact and actually writing that kind and class of insurance in this State…” §1904 (2). Only after representatives of admitted companies have declined to accept the risk can the surplus lines broker place the business with a nonadmitted company.
6. How many declinations are required?
Three. Coverage must be sought in the admitted market before it can be exported to surplus lines. Three declinations are required as evidence that a “diligent effort” was made prior to placing the coverage with an unauthorized insurer. The declinations must come from insurers that are authorized to transact and actually writing that kind and class of insurance in this State but are not corporate affiliates of the SL insurer.
7. What form is used to show that a diligent search has been made?
The Surplus Lines Statement of Diligent Effort -- Form SL-1904. It requires that either the Producer or the SL broker declare that this search has, in fact, been completed, and substantiates the declinations. This form must be completed as instructed and then retained by the SLB for each new surplus lines policy, when a policy renews, or when there is any material change to an existing policy.
8. Does Delaware have an Export List?
No, Delaware does not have an “Export List”. All surplus lines policies for all lines of business are subject to the provisions in Chapter 19, and all surplus lines brokers must abide by those provisions. The Department’s requirement of three declinations applies to all surplus lines business. Although §1906 empowers the Commissioner to declare any class or classes of insurance coverage eligible for export, the Commissioner has not done so as of this date.
9. Who is responsible for getting declinations?
The person who represents the insured. This can be either the retail agent or the surplus lines broker. This person that makes the diligent effort to procure the coverage in the admitted market and get the declinations should complete and sign the SL-1904 form and forward it (if applicable) to the surplus lines broker. The form should be kept with the records of the SL broker.
10. What is surplus lines premium tax? How does it differ from other premium tax?
Delaware law assesses a tax on each dollar of insurance premium written on risks located in the State, including premium written with non-admitted companies. According to Del. C., § 1917, surplus lines brokers are required to remit a tax on business transacted by them with unauthorized companies at the same rate as applies to premiums for like kinds of insurance written by authorized insurers under Title 18.
What makes the tax on SL premium unique is that the tax is paid directly by the insured, rather than the insurer, as would be the case with admitted business. The surplus lines broker collects the tax as part of the premium and remits the tax to the Department on behalf of the insured. It is the SL broker’s responsibility to remit that premium tax to the Department in an accurate and timely manner.
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11. What is the tax rate?
The tax rate is 2%, the same tax rate that applies to authorized business. (1¾ % per §702 and ¼ % per §707)
12. What is the definition of premium?
Premium is defined as: “...the consideration for insurance by whatever name called. Any "assessment," or any "membership," "policy," "survey," "inspection," "service" or similar fee or other charge in consideration for an insurance contract is deemed part of the premium.”(18 Del. C., § 2703)
13. Are SL brokers permitted to charge fees? Is there a limit to the fee amount?
Yes, surplus lines brokers may add fees (as described in § 2703) to the premium amount charged by the insurer. No, there is no statutory limit to the amount a SL broker can charge as a fee. Fee amounts are not regulated by the Insurance Department at this time.
14. Can a surplus lines broker add a tax filing fee to the premium?
No, a surplus lines broker may not charge a fee for performing a State required procedure such as filing taxes, which is a requirement of their licensed status.
15. Are fees included in taxable premium?
Yes, tax must be paid on all premiums, and fees are considered part of the premiums.
16. Are there any types of insurance policies that are tax exempt?
Yes, certain insurance premiums are considered to be exempt from the 2% surplus lines premium tax; however the premium volume must still be reported to the Department. Coverage for the operations of public political subdivisions (government entities such as counties, municipalities, school districts, etc.) is exempt from the premium tax. It is important to note that not all policies procured for public political subdivisions are tax exempt. For example, property coverage on a building that is owned by a university or liability coverage for a community-sponsored festival is not tax-exempt, but D&O or employment practices liability coverage would be tax-exempt. If you are unsure as to whether a policy qualifies for tax-exempt status, contact the Insurance Department for guidance.
17. Is there a special type of tax exempt report that must be filed if we have a tax exempt account?
Yes, the premium volume and policy details must still be reported to the Department. The specific instructions for filing tax exempt reports (SL-1905) can be found on Page 13 of the Surplus Lines Brokers’ Procedures Manual.
18. I have a publication that says that wet marine and transportation is exempt from the Surplus Lines Law. Does that mean that I don’t have to pay premium tax on wet marine premiums?
No, that is not exactly what is meant. Chapter 19, the Surplus Lines Law, sets forth the conditions under which business may be written with a company that is not authorized in Delaware. 18 Del. C., § 1902 states that the Surplus Lines Law does not apply to certain types of coverage – including wet marine. If the Surplus Lines Law does not apply, the conditions for export to a nonadmitted company do not apply, and the business can not be exported to surplus lines. The business must be placed with an admitted company. Tax on admitted business is paid by the insurer.
19. Who is required to file surplus lines premium tax returns?
ALL individual surplus lines brokers licensed to transact SL business in the state of Delaware. Although business entities (agencies, brokerages, firms, etc.) must also be licensed for surplus lines, they should not submit tax returns. It is the Delaware Insurance Department’s position that only people can transact business, not business entities. Therefore, Delaware holds the individual licensee responsible for paying the tax on the business they transact. The Department holds the agency responsible for the conduct of the individual licensee(s) affiliated with that agency, but does not consider that the agency is transacting the business.
20. What premium tax filings are required?
There are three types of filings that are required from individual surplus lines brokers:
- SL-1905 – the Notice of Insurance Transaction. This is an electronic form that must be submitted via email whenever business is written. It gives the Department information about the procuring SL broker, the insured, the policy, the insurer, the coverage, and the tax and fees. This form is due within 30 days of the effective date of the policy. No tax is paid when this form is submitted.
- SL-1917 – Quarterly Premium Tax Report. This is a paper filing that must be signed and notarized. It summarizes the SL premium written during the preceding quarter and calculates the premium tax. Tax should be paid with this report.
- SL-1916 – Annual Premium Tax Report. This is a paper filing that must be signed and notarized. It summarizes all premiums written during the calendar year and calculates any premium tax due or any overpayment. Part 2 of the form reports a breakdown of property/casualty premiums by location of risks in the City of Wilmington, New Castle County, Kent County, and Sussex County. The premium amounts stated on these reports are used to calculate the amount of State support for volunteer fire departments.
IMPORTANT: DO NOT submit the old SLB-M Monthly Report. If an old monthly report is submitted it will be returned. Old forms SLB-M, SLB-A and SLB-C have been replaced and are no longer accepted.
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21. I see on the website that you have a quarterly and annual tax report summary. Which one does the state prefer?
Both forms are required and must be filed as instructed.
22. Are premium tax returns required if a surplus lines broker does not write any business?
Yes, the quarterly and annual premium tax returns (SL-1917 and SL-1916) are required even it the amount is zero ($0.00). The SL-1905 electronic form is not required unless business is written.
23. I see that Delaware requires both the individual and the agency to be licensed for surplus lines, but only the individual files tax returns. What does the agency have to file?
The only filing required from the agency is the annual SL-1706 form that identifies the SL brokers that are affiliated with that agency.
24. Where do I send my premium tax returns?
The Delaware Department of Insurance has established a lockbox operation for the receipt of premium tax payments and related documents. Unless specifically instructed to do otherwise, you should send the premium tax reports and checks (if applicable) to one of the bank addresses listed below.
If using U.S. Postal Service (regular mail): Delaware Insurance Department
c/o National City Bank
6705 Reliable Parkway
Chicago, IL 60686
NOTE: This address is a PO Box – no personnel are present to accept deliveries.
If using Courier Service (FedEx, UPS, etc.): Delaware Insurance Department
c/o National City Bank
Attention: Lockbox # 6705
5635 S. Archer Ave.
Chicago, IL 60638-1656
NOTE: If your courier service requires a phone number on the delivery slip use the Department’s number: 302-674-7300.
25. When are premium tax returns due?
The Surplus Lines Broker Annual Premium Tax and Fees Report (SL-1916) and the Annual Business Entity Report (SL-1706) must be received on or before March 1 each year.
Quarterly tax reports (SL-1917) must be received on or before each April 30, July 30, October 30 and January 30.
26. Is a postmark date acceptable?
No. Premium tax returns and payments must be received on or before the due dates. If the payment and tax return are received separately, the Department will use the later date as the received by date. The Department considers the date the filing is received at the lockbox to be the date received.
27. If I am submitting a zero report or have a refund request, and will not be attaching a check, do I still send my tax return to the lockbox address?
Yes. Part of the services provided by National City Bank is to capture electronic images of all tax forms.
28. What should be attached to the premium tax report?
The only attachment should be a check for payment if applicable. DO NOT attach copies of SL-1905 or policy documents of any kind. All the information needed by the Department is on the forms themselves.
29. The tax form is asking for a SL Broker ID# and Agency ID#. What should I enter in these fields?
The SL Broker ID# is the individual's Delaware surplus lines license number. It is 7 digits, often beginning with zero. DO NOT use their SSN or NPN -- only their Delaware SL license number.
The same is true for the Agency ID#. It should be the agency's 7 digit Delaware SL business entity license number. DO NOT use the Federal EIN or home state license number.
30. I am filling out a courier delivery slip and it requires a phone number. What number should I use?
You may use the Department’s main number: 302-674-7300.
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31. Can the quarterly SL-1917 or the annual SL-1916 be completed online?
Not at this time. The quarterly (1917) and annual (1916 & 1706) forms are paper filings and must be signed by the broker and notarized. The SL-1905 is the only electronic form at this time.
32. What penalties could be assessed in association with premium tax returns?
The Commissioner is empowered to assess penalties for various reasons, but the most common penalty associated with premium tax filings is the Late or Incomplete Filing Penalty. If any broker fails to file tax reports or fails to remit the tax prior to the 1st day of April after the tax is due, the broker is liable for a fine of $25 for each day of delinquency commencing with the 1st day of April. This is a minimum penalty. Further penalties and disciplinary action may be taken, up to and including suspension of the surplus lines broker’s license.
33. Can I request an extension of time for filing my tax return or payment of tax?
Yes. The Tax Section is permitted to grant an extension for up to 15 calendar days if the request is deemed reasonable. Requests for longer extensions must be reviewed by the Commissioner. All requests are reviewed on an individual basis. Requests must be received in writing (electronic PDF format is acceptable) at least 30 days before the tax due date.
Send requests to: Delaware Insurance Department
Premium Tax Section
841 Silver Lake Blvd.
Dover, De 19904-2465
Or email request to: Ann Fletcher, Tax Coordinator at ann.fletcher@state.de.us.
34. How do I request a refund if I have an overpayment?
The Department will automatically request refunds based on the amount listed on the Annual Tax Report (SL-1916) after careful review of the tax return. It is not necessary to send a separate request for refund.
35. How do I amend my premium tax return?
Use a blank copy of the tax return for the calendar year or quarterly filing you are amending. Forms for prior years can be found by clicking the link labeled Prior Year Forms on the Surplus Lines Page. Complete the return as if filing for the first time, including signatures. Attach a cover letter explaining the reason for the amendment. Follow the same filing instructions as the original return.
36. In Part 2 of the annual tax return we provide information about the State Support of Fire Companies, but the form says this is not a tax. Can you please tell me why we provide this information to you?
This section of the form is used to report what is generally referred to as “Fire Tax” because the premium amounts stated on these reports are used to calculate the amount of State support for volunteer fire departments. Fire Tax is not actually a “tax”, but rather a “break-down by lines and location” report.
On the premium tax report, a company must report ALL insurance business written in Delaware by the broker during the previous calendar year. But the Fire Tax Report assembles separate data only on property/casualty lines of business and breaks down the premiums based on the location of risks: City of Wilmington, New Castle County, Kent County, and Sussex County, respectively.
Based on the reported Fire Tax figures, a specified percentage of the funds collected through premium taxes is then disbursed to volunteer fire departments throughout the State, and to the City of Wilmington in accordance with 18 Del. C., §705(b).
IMPORTANT: The information requested in Part 2 of the annual tax report is required by law. If Part 2 of the form is not completed, the tax return will be considered incomplete will not be accepted. The tax report will be returned to the broker for completion and the broker will be subject to the Late or Incomplete Filing Penalty.
37. If we have a credit due in one quarter on return premiums, should we carry it over to the next quarter? For example, in the 2nd quarter we had a credit due to us, but in the 3rd quarter we owe tax. Should we apply the credit to the 3rd quarter amount and pay the difference, or should we pay the entire 3rd quarter amount and wait for the refund to come later?
You may apply the credit to the third quarter amount and pay the difference, but you must make a note of it on the third quarter SL-1917 form showing that it is a credit from the second quarter. Please note that you may not carry a credit from year to year. When you file the annual SL-1916 form you will report all the premiums written during the year, as well as all the return premiums, and if there is a credit at year-end the Department will issue a refund check.
38. We are normally a wholesaler and receive our business through a retail broker. We now have a case in which we are the Retailer and the SL Broker. What forms are required and what do we have to file with the Department when we place this business?
First, you need to complete the SL-1904 listing the declinations that show that a diligent effort was made to place the risk in the admitted market. This form gets placed in your files. Do not send it to the Department.
After the coverage is placed, submit the SL-1905 Notice of Insurance Transaction Form as an email attachment in Excel format. This form must be submitted within 30 days after the policy effective date. Do not send the SL-1905 in paper or PDF format and do not attach anything to it. You will pay the tax on the policy when you submit the next quarterly SL-1917.
If you do not have a policy number when you submit the SL-1905 – and you used a binder number – you will need to submit a SL-1908 Binder Number Replacement Form when you get the policy number. It must be printed and mailed to the Department.
39. Does Delaware have a “White List”?
The Department maintains the Eligible Surplus Lines Insurers listing – also referred to as the Bulletin # 5 listing – on its website. Each SL broker must restrict surplus lines business placed by him or her to the insurers on the listing.
The status of eligibility, if granted by the Commissioner, only indicates that the insurer appears to be sound financially and to have satisfactory claims practices, and that the Commissioner has no credible evidence to the contrary. Placing a company on the list of eligible SL insurers does not require the Commissioner to determine the actual financial condition or claims practices of the unauthorized insurer.
40. I am looking at the Delaware listing of Eligible Surplus Lines Insurers, but the company I’m looking for is not on the list. What are my options?
Your only option is to place the risk with another carrier. Delaware law, §1907 (a), specifically states, “A broker shall not knowingly place surplus line insurance with an insurer that is unsound financially or that is ineligible under this section” [emphasis added]. The Department publishes a list of insurers deemed eligible to place surplus lines coverage, and all SL brokers are permitted to place business with listed eligible insurers only.
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41. I need to submit a filing on a policy that was placed with a carrier that is not on Delaware's Eligible Surplus Line Insurers List – it is actually on the list of “Ineligible” Insurers. How should I handle this?
The companies on the “Ineligible” Insurers list are Delaware domestic companies, meaning that they are incorporated in the state of Delaware. When a company is domiciled in DE, it is admitted in DE. Delaware domestic SL insurers can not write business covering Delaware risks on a surplus lines basis.
Surplus Lines Brokers should not be placing business with insurers that are not on the listing of Eligible Insurers that is published by the Department, but if it happens there are a couple of ways of handling the situation.
If it is a multi-state surplus lines policy, the DE portion of the coverage must be placed with a different surplus lines company.
If the entire risk is DE business, there are two possibilities and options:
- It may actually be admitted business – subject to rate & form filing requirements, etc. just like any other standard coverage
- If it is definitely surplus lines, it must be written with another surplus lines company.
Check with the underwriter. If it is admitted business, then you don't need to report it or collect and pay taxes on it -- the company is responsible for that. If it is surplus lines, see if the Delaware risk can be written on another carrier's paper -- usually an affiliate. That's what is most often done.
Once you get a determination, make the appropriate filing. NOTE: The SL broker may be subject to penalties for failure to comply with Delaware Surplus Lines Law, which states that surplus lines coverage can only be placed with approved eligible SL insurers.
42. Does Delaware allow “Courtesy Filings”?
No. The Department defines a courtesy filing as the submission of forms or taxes from a Delaware licensed surplus lines broker as a “courtesy” to an agent/producer/broker who has placed insurance with an unauthorized, eligible surplus lines insurer, but is not licensed as a surplus lines broker in this State.
Because Delaware licenses both resident and non-resident surplus lines brokers, courtesy filings are not allowed. If a non-resident surplus lines broker intends to place business on Delaware risks he or she should obtain a Delaware surplus lines license before doing so.
43. Is direct procurement by an insured permissible in Delaware?
Delaware law is silent regarding self- or independent- procurement of insurance covering risks located or to be performed in the state of Delaware from unauthorized insurance companies. However, it is the Delaware Insurance Department’s policy to treat self-procured insurance in the same manner as surplus lines insurance as set forth in Title 18 Chapter 19. There is a premium tax of 2% imposed on the “proportion of the premium which is properly allocable to the risks or exposures located in this State.” (§ 1917)
44. Is direct procurement allowed when a Surplus Lines Wholesaler or Retailer are involved in placement of the policy but not licensed in your State?
No. First, let’s clarify the definition of direct procurement. In Delaware, if a consumer contacts a surplus lines insurer directly to procure coverage on their own behalf, without any involvement from an insurance licensee, then it is considered direct procurement (also called self- or independent- procurement).
If there is a surplus lines broker involved in any capacity, the placement is not considered direct procurement. In that case, the surplus lines broker -- even if it is a wholesaler -- must be licensed for SL with the Department.
45. Does a wholesale broker need to be licensed for surplus lines in Delaware and make State filings?
If the wholesale broker is contacted by a retail producer or broker (not licensed for SL), and the wholesale broker procures the coverage directly, then the wholesale broker must be licensed in Delaware and make all filings to the State.
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 can not 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.
56. May we stamp the policy/dec page/endorsement in our own office, or do you require us to send filings in to be stamped?
Yes, you may stamp the policy in your office. In fact, it is the surplus lines broker’s responsibility to be sure the policy is stamped. Delaware does not have a stamping office, so you should not send policy documents to the Department.
57. What gets stamped?
The Department advises that the declarations page of the policy and any endorsements should be stamped. If a binder is used before the policy is delivered, the binder should be stamped.
58. Do you require us to provide an original stamped copy of policies to the insured?
Yes, this provision is for the benefit of the insured. It ensures that the consumer is aware that the company providing the coverage is not licensed in Delaware and the Insurance Commissioner does not have regulatory authority over that company.
59. Is the stamp a rubber stamp or a paper insert? If rubber, do you provide this to us or do we need to order one ourselves? If paper, can we print the stamp?
It does not need to be a rubber stamp, but it should be imprinted on the page itself – not a paper insert. If you choose to use a rubber stamp, you will need to order it yourself. The Department does not provide the stamp. The wording can be computer printed on the binder/dec page/endorsement.
60. Are there any font size or color requirements?
There are no color requirements. The font size shall not be smaller than 8 points to be compatible with policy readability requirements as set forth in Regulations 605 and 701.
61. Does the binder/dec page require a signature? If so, whose signature is required?
Not specifically a signature, it could be initialed. The name of the surplus lines broker who procured the coverage is required and must be printed.
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