How to Stay Compliant When Filing California Surplus Lines

How to Stay Compliant When Filing California Surplus Lines

There is a lot of information to juggle when working with surplus lines. Keeping track of deadlines, tax rates, and new regulations can feel overwhelming. But not filling properly can lead to big fines and penalties. Here are four ways you can stay compliant when filing California surplus lines.. 

1: Understand California Compliance Requirements

Doing surplus lines business in California is different than in other states. If you’re planning to file in California, here are a few things you need to know.

     All Syndicates Must Be Reported in California Filings: Syndicates involved in policy writing must be reported. Only syndicates which appear on the most recent NAIC Quarterly Listing Alien Insurers are eligible to transact surplus line insurance in California.

     Consortiums Must Be Reported As a Breakdown of Syndicates: In California, consortium numbers are not recognized syndicate numbers. Consortiums are groups of specific syndicates. Instead, you will need to provide the specific breakdown of syndicates included in your consortium.

     Stamping Fees and Surplus Lines Taxes Calculations Are Based on Varying Criteria: Stamping fee payments and surplus lines tax payments are calculated based on varying criteria for due dates. Stamping Fees are due based on the month the policy was filed with the Surplus Lines Association. It is possible to have taxes owed on a policy that hasn’t been submitted to the SLA yet. To learn more about how these are calculated, click here.

     Current Codes and Legislation: Spend some time studying and getting to understand the compliance requirements for California. The more in-depth your knowledge, the easier it will be to file. Some documents we suggest referencing include:

California Insurance Code

California Insurance Code of Regulation

California Recent Surplus Lines Legislation

InsCipher Surplus Lines Compliance Glossary


2: Sign Up For Surplus Lines Newsletters

There are several organizations that publish helpful information related to surplus lines. These can keep you up to date with changing surplus lines requirements. Signing up for these newsletters is a great way to make filing easier. You’ll always be alerted to important information that is essential to filing in California. Some newsletters to consider signing up for include:

The California Department of Insurance (CDI) is the consumer protection agency for California’s insurance marketplace. The CDI safeguards all of the state’s consumers by fairly regulating the insurance industry. You can sign up for their newsletter or follow them on social media here.

The Surplus Lines Association of California serves as a statutory surplus line advisory organization to the CDI. You can sign up for their newsletter here.The Securities and Insurance Licensing Association (SILA) is an organization that connects insurance professionals. It provides education and up-to-date resources to its members. By becoming a member, you have access to many benefits. Some benefits include frequent updates on insurance licensing and securities regulatory changes. You can become a member here. If you are not a member, you can still read their frequent regulatory updates here.

3: Establish Effective Workflows In Your Agency

Surplus lines require the collective work of several people at your agency. Effective workflows are essential for coordinating everyone’s efforts and filing surplus lines properly. Establishing workflows can help you stay compliant. You can build effective workflows by:

     Improve Your Communication: Frictionless workflows need everyone to be on the same page. Clear channels of communication make it possible for your processes to flow.

     Identify Inefficiencies: Find areas in your workflows that are not working properly. These may be processes you need to digitize. Or tasks that could be automated. Or hiring more employees with the skills your team is currently lacking.

     Create Better Organization: Having clear organization is an important aspect of frictionless workflows. Your organization systems need to be shared by all members of your agency. Having one organization process for your entire agency keeps everything streamlined. Additionally, all of your data needs to be organized in one central location. This can be done in spreadsheets or by using surplus lines management software.

4: Utilize Technology Solutions

California surplus lines are quite complex. However, there are several ways technology can create simplicity for your filing process. Technology solutions are a great way to minimize errors and save time and money. Consider utilizing one or more of the following technology solutions:

Free California Surplus Lines Tax Calculator: Calculating California surplus lines transactions is a breeze with a tax calculator. That being said, it’s important to use accurate technology with regularly updated tax rates. You can find a free tax calculator that does all that here

Surplus Lines Management Software: There are so many moving parts involved in surplus lines filing that it can be difficult to keep track of everything. Stay organized and stay compliant by using a management software. This technology solution can help you navigate complex regulatory compliance requirements. It accurately calculates California surplus lines taxes. It also reconciles and validates filings before submission.

License Management Software: Staying on top of your licenses can be very time consuming. And missed deadlines can be costly mistakes. Track all of your licensing needs with this license management software.


By implementing these four methods, you can keep on top of changing compliance requirements. You can better manage your workflows. And you can stay compliant when filing California surplus lines.

InsCipher is an insurtech company providing software and services that are revolutionizing inefficient insurance processes. Save your agency time and money by automating surplus lines compliance, filing, and reporting. Want to learn more? Request a free demo today

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