California

Revised: 07/12/2019

Tax Rate

3% Fees are taxable- see SLACAL Bulletin #997 http://www.slacal.org/publications/bulletins/900-series/

Stamping Fee

.200% policies effective 1/1/2013 - 12/31/2019 .250 policies effective 1/1/2020 Each premium bearing transaction reviewed by the Association is charged a stamping fee. Brokers will receive an invoice from the Association at the beginning of each month showing the balance due.

Surcharge

None

Tax Rate Notes

Fees negotiated between the broker and insured to compensate the broker for services performed on behalf of the insured are not generally considered taxable premium. The fee must be levied solely by and for the benefit of the surplus line broker and not remitted to the nonadmitted insurer. This type of fee, typically referred to as a “broker fee”, must be disclosed to, and accepted by the prospective insured, prior to the placement of coverage.

Bulletin #997  http://www.slacal.org/docs/default-source/bulletins/997.pdf?sfvrsn=2

SLA Bulletin 1371-  Brokers’ Fees and other Similar Fees   http://www.slacal.com/docs/default-source/bulletins/bulletin_1371.pdf?sfvrsn=2

NRRA Allocation

California law will require a tax on the entire premium (100%), regardless of where the risk is located, when California is the home state of the insured. Similarly, on multi-state policies in which California is the home state, the stamping fee is to be calculated on 100 percent of the premium, not just the California portion.

Affidavit Required?

Yes –  SL-1 and SL- 2

A completed Confidential Report of Placement (SL-1 form) is required for all new business, renewal or extension endorsement extending the policy period past 90 days in the aggregate in a 12-month period.

A completed Diligent Search Report (SL-2 form) is required for all new business, renewal or extension endorsement extending the policy period past 90 days in the aggregate in a 12-month period.  The two exceptions for performing a diligent search are if the coverage is on the current Export List or if the insured qualifies as the NRRA definition of an exempt commercial purchaser/commercial insured.

Filing Deadline

For all new and renewal policies, the documentation must be provided within 60 days of placing the insurance with a surplus lines insurer

http://www.slacal.org/brokers/broker-filing-procedures

Annual by March 1st      Monthly within 60 days from month end

Tax Due Dates Forms and Instructions (Annual and Monthly)
http://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/tax-forms-instruct-and-info/2018-Tax-Forms-and-Instructions.cfm

 

 

 

 

Export List

Online version  http://www.slacal.org/brokers/export-list

pdf Version  http://www.slacal.org/docs/default-source/general-content-documents/Resources/export-list2018.pdf?sfvrsn=12

Filing Requirements

The SLA accepts filings from USPS and electronically through the SLIP portal at https://slip.slacal.org. Policy filings and required forms are not accepted via email, fax, or any other method, unless specifically requested by an SLA employee.

CA  encourages all filers to file using our Surplus Lines Information Portal (SLIP) electronic filing system. If you are not yet signed up for SLIP, please email support@slacal.org. In your email, please include the license number under which you will be filing.

For information on how to use SLIP, please see SLIP FAQs.

  • The documents required to be filed are the declarations page, certificates, cover notes, or binders for all new and renewal policies.
  • Corresponding Confidential Report of Placements (SL-1 forms) and
  • Diligent Search Reports (SL-2 forms), endorsements, and cancellations.
    The SL-2 form is not required if the type of coverage or risk meets the Export list requirements or the insured qualifies under the NRRA definition of an exempt commercial purchaser/commercial insured.
  • Taxes are due annually by March 1st.  CA SLA Tax Filing Guide  http://www.slacal.org/resources/broker-taxes-fees
  • Monthly if your preceding year’s tax liability was $20,000 or more
  • Mail the Annual Statement and Tax Return to:
    First Class or Express Delivery
    State of California
    Department of Insurance
    Tax Accounting/EFT Unit
    300 Capitol Mall, Suite 14000
    Sacramento, CA 95814 

 

Forms

CASLA Forms Page:  http://www.slacal.org/brokers/broker-filing-forms/all-forms

SL-1 Instructions  http://www.slacal.org/docs/default-source/general-content-documents/Filing-Forms/sl1-instructions.pdf?sfvrsn=4
SL-1  Form (online)   http://www.slacal.org/brokers/broker-filing-forms/sl1-form

SL-2  Instructions  http://www.slacal.org/docs/default-source/general-content-documents/Filing-Forms/sl2-instructions.pdf?sfvrsn=2
SL-2 Form (online)  http://www.slacal.org/brokers/broker-filing-forms/sl2-form1
Requires you enter information that the risk was submitted to at least (3) insurers that are admitted in California
                                                                     and who actually write the type of insurance 

Gap – For Layered Risks    http://www.slacal.org/brokers/broker-filing-forms/gap

D-1 Notice to Insured –   http://www.slacal.org/docs/default-source/general-content-documents/Filing-Forms/d1-form.pdf?sfvrsn=2
The disclosure statement must be signed by the applicant at the time the producer accepts an application for any insurance policy issued by a surplus lines insurer, other than a renewal of that policy.

D-2  Notice – Policy Attachment – http://www.slacal.org/docs/default-source/general-content-documents/Filing-Forms/d2-form.pdf?sfvrsn=2
Every policy and every certificate evidencing the placement of insurance issued by a surplus lines insurer must contain, or have affixed on the front by the insurer or surplus line broker, this disclosure statement in 16-point bold type.

Filing Checklist  http://www.slacal.org/docs/default-source/general-content-documents/Resources/sla-of-ca-filing-checklist.pdf?sfvrsn=2

Tax Forms and Instructions
http://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/tax-forms-instruct-and-info/2018-Tax-Forms-and-Instructions.cfm

Exemptions

ocean marine, aircraft or spacecraft, interstate railroad, and reinsurance of the liability of an admitted insurer. (Refer to CIC Section 1760.5 for additional information.)

 

Late Filing Fees

If the broker fails to make payment by some method other than EFT or the payment is not timely, the broker will be assessed a 10% penalty plus interest on the amount due unless the penalty is waived as provided under 10 CA ADC § 2330.3 and 10 CA ADC § 2330.4.

If the broker makes payment by some method other than EFT and the payment is not timely, the broker will be assessed a 20% penalty plus interest on the amount due unless the penalty is waived as provided under 10 CA ADC § 2330.3 and 10 CA ADC § 2330.4.

Eligible Surplus Lines Companies

Search function on the CA SLA website     http://www.slacal.org/home/filer

Direct Procurement

Yes –     Any person whose home state is California may negotiate and effect insurance for his or her own protection against loss, damage, or liability with any nonadmitted insurer. It is no longer required to provide the insurance through a surplus lines broker.

On or before March 1st of each year, the insured whose home state is California must file with the Commissioner a sworn statement of all business transacted during the last preceding calendar year. The statement must include:

a. the total amount of the gross premium;
b. the total gross premium for California risks when 100% of the premium is attributable to risks in California;
and
c. for multi-state risks, the percentage of gross premium allocated to California and each other state.
d. A nonadmitted insurance tax at the rate of 3% must be paid on the gross premiums for insureds whose home state is California.

Courtesy Filings

No

Surplus Lines Association

California Surplus Lines Association & Surplus Lines Stamping Office
SLA Executive Director – Benjamin J. McKay
Stamping Office Director – Joy Erven

50 California St., 18th Floor
San Francisco, CA 94111

Phone: (415)434-4900 Fax: (415)434-3716

Website: http://www.slacal.org/

If Monthly Tax Payments is paid by CHECK, mail the CHECK payable to CALIFORNIA STATE CONTROLLER’S OFFICE and the monthly tax payment voucher to:

State of California
Department of Insurance
Tax Accounting Unit
P.O. Box 1918
Sacramento, CA 95812-1918 

Department of Insurance

http://www.insurance.ca.gov/

Sacramento Office
300 Capitol Mall, Suite 1700
Sacramento, CA  95814

 

Surplus Lines Law

Insurance Code – INS    http://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=INS&tocTitle=+Insurance+Code+-+INS

Policy Stamp

Every policy and every certificate evidencing the placement of insurance issued by a surplus lines insurer must contain, or have affixed on the front by the insurer or surplus line broker, this disclosure statement in 16-point bold type.

Printable Form D-2  http://www.slacal.org/docs/default-source/general-content-documents/Filing-Forms/d2-form.pdf?sfvrsn=2

Revision History

7/12/2019   Reviewed and updated all info and links
2/7/2016     Updated links to D-1
3/12/2014   Updated link to tax forms and added note and link to zero filing clarification
6/21/2013    Added note on monthly tax payment threshold
11/21/2013  Added clarification that Broker Fees are not taxable.