Back CA - New Surplus Line Broker Requirements

I've received two e-mails from the DOI about the new surplus line broker requirements and cannot decipher either of them. I am a licensed Fire and Casualty Broker. As a retail broker, I write some non-admitted paper through MGA's and Wholesalers. My Question: Am I required to comply w/ the new requirement and get a Surplus Lines Broker license? Dazed and Confused by Insurancespeak...

The only way that you be required to carry an E & S license is if you are doing the filing with CA. If you are writing through an MGA just make sure that they are properly licensed and you are ok.

If you are a broker placing business through a GA you WILL need to get this license. Our agency is in the same position so I called the DOI to confirm... And yes you do need to pay the fee's. Miki Russ Lutz and Russ Insurance Services, Inc.

YIKES: Sadly, I am still confused. The two replies are contrary to each other. Perhaps I should find a new line of business...

You don't need a SL license if you are writing or placing through a surplus lines broker. Yes, you need to check if the MGA you're writing with has a surplus lines license.

If you are placing the surplus line business through a wholesaler/MGA that holds a valid surplus line license and is in compliance with the new regulation then you will not need to comply with the new requirements for surplus line brokers

Dear Dazed & confused. The law requires those individuals who work AT a Surplus Lines insurance Brokerage to obtain their individual SLB license, if they transact SL business. We are a SL brokerage. In order for our brokerage to obtain a non resident SL lincense in another state, I had to obtain an individual SL license prior to applying for a non resident SL license in another state. This new law just brings California into compliance with other States requirements: Heres the pertinent portion from the DOI: "Effective January 1, 2008, individuals licensed as a Fire and Casualty Broker-Agent may not transact surplus lines business on behalf of a surplus line broker's organizational license, without also holding an individual surplus line broker license" Another words, if you work AT a SL Brokerage AND transact SL business with an unlicensed Insurance Company, you must obtain an individual SL License. If you work as a "sub broker" you must be licensed as a Fire & Casualty Producer and place this business by and through a Licensed Surplus Lines Broker. It appears you are NOT working at a Surplus Lines Brokerage, therefore your not required to obtain an individual SL license. I hope this Helps.

Yes, it Does help. I'll stay in the insurance biz now. Thanks!!!

If a wholesaler has employees who do only back room business [accounting, SL filing preparation, preparation of endorsements, other record keeping, etc] where they themselves never ever interact with SL carriers NOR retail clients, do they have to have [1] a personal F&C license; and [2] a personal SL lines license??? Its interesting to me that each SLA release refers to "surplus lines broker functions" [or similar] which makes it seem that only those actually involved in the broking process have to have individual SL licenses. That is what we need to be tied down and the SLA nor the DOI seem to be able to address that situation in language other than insurance-speak. This entire issue is needlessly confusing and obviously a rush to judgement that should have been better thought out before it was announced.

I was on the conf call when one of the agency principles - who is on the board of American Agents Alliance here in CA - called into a DOI officers office. If your not a SURPLUS LINES broker - then NO you dont need a new license! Steve