For many insurers, filing annual reports for their surplus lines policies is one of the most time consuming, confusing, and frustrating parts of writing surplus lines. But before you throw your hands in the air and promise to never write a surplus lines policy again, take a look at the top 5 things that can help make filing your annual reports a breeze.
1. Due Dates Are Spaced Out Over 3 to 4 Months
Every annual report for every state that requires them is not going to be due all at the same time.
The first annuals will start being due towards the end of January and the last ones are usually due towards the end of March or the beginning of April.
However, even with the large range of due dates, you will still need to be filing 4th quarter and monthly reports with the states that require them. If you don't stay on top of it, it's easy to fall behind, which may lead to expensive late fees. (Ouch!)
But, there's more good news: a lot of states (18, to be exact) accept reports filed through OPTins.org. Filing deadlines and related info for these states are available publicly on the OPTins site to help you start planning ahead.
2. Not All States Require Annual Reports
This is definitely good news because it's one less report you have to break down and reconcile. The states that do not require reports that involve an annual reconciliation:
- North Carolina
- New Jersey
- New Mexico
- South Carolina
Most of these states, however, still have a 4th quarter report that needs to be filed. Out of this list, only one state does not have anything large due. Thanks, Utah, for being awesome. At least in this regard.
Additionally, two other states may or may not have quarterly requirements, depending on your circumstance:
- If you write policies in Mississippi, you don't have to file a report, but you must make a semi-annual tax payment and pay a quarterly fee to the Mississippi Windstorm Underwriting Association (MWUA).
- If you have a resident surplus lines license for North Carolina, you'll need to file a quarterly report; if you are not a resident, no report for you.
3. Semi-Annual Reports Are Not Quite as Intense as Annual Reports
Basically, with a semi-annual report, you still go into the same level of detail as with the annual reports. But instead of doing it for all 12 months all at once, you break it into two smaller chunks.
Because of this, you're basically cutting your workload in half.
So, let's give those states that operate on semi-annual schedules some love:
- Thanks, Washington, D.C.!
- You're the best, Arizona!
- Indiana, we love you!
- You have our heart, Illinois!
- Maryland, you make us merry!
- Minnesota, we're totally into you!
- We're mad about you, Michigan!
4. Tennessee Is (Currently) the Most Frustrating State to File With
Before we explain why, we just want to put it out there that we think Tennessee is great. Truly, we do.
However, they have a pattern of changing their procedures for filing surplus lines reports in the middle of the year. This causes both confusion and added work in order to get an accurate reconciliation on the annual report.
A mid-year switch can cause a lot of discrepancies with policies filed before the switch that get endorsed after the switch. Sorting these out and determining the right amounts is an extra step that you will now have to take when compiling your annual report.
There has also been confusion regarding how reports should now be filed, as Tennessee also changed these standards more than once.
But, there is hope. A lot of these problems were caused by the dissolution of NIMA, and now we're hopeful that Tennessee has figured out how they want to handle surplus lines on their own.
Here's to hoping that next year brings far less changes!
5. It's Possible to Turn Your Surplus Lines Over to Someone Else...
Not to brag, but at InsCipher, we've really got surplus lines figured out. Our automated system means you don't have to keep reading bulletins for every state to stay compliant with changes like what happened with Tennessee because we're already doing that for you.
Did you know, for example, that in some states, even if you don't write business there, you are still legally obligated to file a report in order to stay compliant and maintain your license in that state? We know, and we can take care of these zero filings for you.
We also hold licenses in all 50 states, so as long as a state accepts courtesy filings, we can file on your behalf. And, even if it doesn't, we'll file for you under your licenses—that's something many of our competitors don't allow.
Because our system is housed online, there's also a lot more transparency with your surplus lines and how we handle them. All of the information for every state and every type of transaction is easily accessible in one location, including the status of your filing.
You Have Two Choices
In all honesty, if you want to reduce the overwhelming workload required by surplus lines, there are really only two choices:
- Stop writing surplus lines policies and miss out on the revenue these policies bring, or
- Work with InsCipher
We're not trying to sell to you—we're just being honest. InsCipher is the way to go if you want to keep writing business but not have to deal with decoding all of the red tape that's different for every single state.
You don't have to work your way through all the complexities of annual filings alone. We've got your back. Just give us a call or send us an email: