CA| Bulletin #1498 from the Surplus Line Association of California, addresses licensing requirements for surplus line insurance in California on behalf of an business entity licensee.
Key Points:
- Activities Requiring a License: Both business entities and their employees must have a California surplus line broker license to transact surplus line insurance for California home state insureds, regardless of their location or residency status. “Transacting” includes soliciting, negotiating, or effecting insurance with non-admitted insurers.
- Basic Requirements to Obtain a License: The process for a licensed broker-agent to obtain an individual surplus line broker license involves meeting minimum requirements, completing an online application, paying the licensing fee, and maintaining good standing with regulatory requirements. No additional education or exam is needed.
- Endorsement and Bond Requirements: Individuals endorsed to a licensed surplus line business entity do not need a $50,000 surplus line bond if they only transact on behalf of that entity. However, if they place surplus line business independently, they must have their own bond.
- Potential Penalties: Transacting surplus line insurance without a proper license can lead to criminal misdemeanor charges, including fines, imprisonment, or both. Other penalties include license suspension and revocation.