Surplus Lines Compliance
From initial policy reporting to excess and surplus lines insurance tax filings, ILSA understands surplus lines compliance. We were the first to offer third-party surplus lines tax filings services nationwide, and we continue to set the industry standard. Since 2005, ILSA has helped thousands of surplus lines brokers meet their compliance obligations and saved them millions of dollars in penalties and fines.
We’ve seen tremendous growth in excess and surplus lines during the last few years. We expect this trend to continue since surplus lines addresses insureds’ needs not only for volatile risks and high-end exposures, but also for a variety of emerging risks. It’s an exciting time to be in surplus lines! Still, producers often find this market challenging. Certainly, dealing in surplus lines business comes with lots of new regulatory requirements. But ILSA makes it easy to stay in compliance.
We also offer unrivaled flexibility for our surplus lines tax filings clients. We’ll gladly file surplus lines policies and tax reports for you in all states where you are licensed. However, if you want to handle your resident state yourself, that’s fine. Some clients only want us to file for them in certain states … especially the more challenging states.
Of course, policy reporting procedures vary by state. We find, however, that the requirements generally fall into four “buckets.” Many states offer electronic policy filings and do not require supporting documentation (affidavits, etc.) at the time of policy reporting. These are the “easy” states. (Be aware, however, that some of these states require supporting documents when it’s time for surplus lines tax filing reports.) A much smaller number of states offer online policy reporting, but require supporting documents immediately.
Another large group of states require licensees to consolidate surplus lines policy information into a single report. This is where many surplus lines producers run into trouble. Did a particular policy make it into the report? If not, who has that policy information now? In a busy office, it’s all too easy to forget a single transaction weeks or months after binding coverage. The remaining states plan to use a paper-based policy reporting process for the foreseeable future.
Do you know what the various states require? ILSA brings the compliance information you need together in one place. We know the requirements for all the U.S. states and territories. You have instant access to surplus lines tax rates, state forms and fees, and state stamp templates. You can also check policy reporting deadlines and supporting documentation requirements. Our long-standing relationships with surplus lines regulators means we learn about process changes as soon as the states implement them. Our knowledge base updates continuously since we report surplus lines policies to that states on an almost daily basis.
ILSA Makes Surplus Lines Policy Reporting Easier
We streamline the policy information reporting process. You report policy details as soon as you bind coverage. Our secure Surplus Lines Industry Connection (SLIC) prompts you for all the required information. If you utilize AIMS, AMS or another commercial information management product, ILSA can transfer policy information directly from your system to ours. Even if you use a proprietary system, if it can generate an Excel-compatible document, ILSA can import your data directly. SLIC also lets you instantly upload required documents such as binders, declaration pages, policy copies and affidavits. You have 24 hour access to all policies reported to ILSA and your uploaded documents.
Once you upload a policy, our experts check the information provided against the policy declaration page for accuracy. If anything looks “not quite right,” your personal Surplus Lines Specialist contacts you immediately for clarification. Once we verify the policy information, we forward that information to the states as needed. ILSA interfaces directly with OPTIns, SLIP, and the other state-specific portals.
And remember those states that use reports to collect policy information? ILSA collects the required information as you write policies and holds it securely in our automated system. At the perfect time, we generate your report and submit it to the state, with your approval.
Surplus Lines Tax Filings
Different states collect premium taxes at different times. Surplus lines tax filings may be due monthly, quarterly, semi-annually, annually or some combination of these. Late filings may incur substantial penalties. Some states calculate interest on unpaid premium taxes on a daily basis! Many Property and Casualty producers cite fear of missing surplus lines tax filings as a major reason they stay out of the non-admitted market.
ILSA makes it easy. We track when your surplus lines tax filings are due. Our Surplus Lines Tax Specialists send “friendly reminders” by email about upcoming filing deadlines. This gives you plenty of time to double-check that all policies have been reported. (A report deadline won’t sneak up on you again!) Our tax specialists also double-check your premium tax calculations. We include all state-specific fees and taxes such as Stamping Fees, Fire Marshal Taxes and CAT Fees. Remember, the states still hold you responsible for the accuracy of your surplus lines tax filings. For that reason, you always receive a copy of your premium tax report for review before we file it. ILSA forwards your report to the state only after you approve it.
Convenient Tax Payment Options
Your dedicated Surplus Lines Specialist draws funds for tax payments directly from your preferred bank account. (You always receive notification prior to the transaction.) For those few states that still prefer paper tax reports and physical checks, ILSA lets you know exactly how much the check needs to be for and who it needs to be made out to. You send your signed tax report and check to ILSA, and we take care of everything from there. Whether electronic or on paper, you receive a copy of all filed reports and confirmations of receipt/processing for your records upon request. Also, if you find yourself the subject of a random audit, ILSA is there for you. We keep backups of all filings and reports, payment processing and pertinent correspondence.
Some states require notification that you have not written business in their state during the reporting period. If you’re in our Surplus Lines service for these states, we keep a watchful eye on the zero report filing deadline. If we don’t receive policy information from you during the reporting period, your ILSA specialist automatically prepares and submits zero reports for you in a timely manner.
Surplus Lines License Tracking
Because you may still need to file surplus lines tax reports even if you aren’t transacting business, it’s essential to know where you’re actively licensed for surplus lines. We check your license status nationwide when you first come on service. You have 24 hour access to your surplus lines license information via our secure Compliance Gateway. We just ask that you let us know if you independently obtain additional surplus lines licenses. (Need help getting your initial surplus lines license? ILSA’s Licensing Team can help you with that.)
If you’re not already in ILSA’s License Renewal Service, we offer a special Surplus Lines Tracking Service. It regularly updates the surplus lines license information shown in the Compliance Gateway. Consequently, you always know whether you hold an active surplus lines license in a state BEFORE you write business there.
Don’t let concerns about managing compliance keep you from thriving in the non-admitted market. We handle the intricate details of surplus lines compliance for you, so you can focus on growing your business.