Surplus Lines Producer Licensing, Eligibility, and Recordkeeping
Licensing
An Indiana surplus lines producer must hold a property-casualty producer license in good standing and the surplus lines authority the statute and DOI rules require, with continuing education and renewal maintained. Non-resident producers may place Indiana risks where the NRRA home-state rules allow, but only if properly licensed in the home state. The producer - not the non-admitted insurer - carries Indiana's compliance duties: search documentation, disclosure, tax collection, and filing.
Fiduciary and premium handling
Premiums and taxes collected for surplus lines business are fiduciary funds. Keep them in a properly identified account, do not commingle with operating funds, and remit tax on time even when the insured has not yet paid - the producer remains liable for the tax.
Records a candidate must be able to list
- Diligent search evidence and written declinations
- The signed or acknowledged non-admitted insurer disclosure
- Copies of the policy, declarations, and endorsements
- Premium tax calculations, returns, and proof of payment
- Correspondence with the insured about coverage limitations Retain these for the period required by Indiana law and DOI rule (commonly at least five years) and make them available on examination.
Traps
Letting unlicensed staff perform the market search or sign filings; assuming the surplus lines insurer will handle Indiana tax and disclosure; describing the producer as the insurer's agent when the producer deals with and owes duties to the insured; discarding declination notes once the policy issues; holding premium in a general operating account.
Rule of thumb
Build one file per placement, in this order: authority, search, disclosure, policy, tax, retention. If an examiner asks for any of the six and you cannot produce it, the deficiency is a licensing and recordkeeping problem, not a paperwork one.