PA Surplus Lines cheat sheet

Surplus lines insurers are non-admitted: they are not licensed in Pennsylvania and are not subject to PA rate/form filing approval before use.

Eligibility gate: an insurer may write PA surplus lines only if it appears on the PA Insurance Department's current list of eligible surplus lines insurers.

The Department publishes the eligible insurer list and removes an insurer when it fails financial or reporting standards; placement with a delisted insurer is a violation.

Annual statement and financial reporting obligations flow through the insurer's domestic regulator and the NAIC, not through PA form filings.

A surplus lines producer must confirm the insurer's eligibility status as of the policy effective date, not merely at the time of first appointment.

Pennsylvania stamping office functions (policy filing/verification) are performed through the state's designated surplus lines stamping office; the producer retains responsibility for accuracy.

Diligent search documentation must show declinations from admitted insurers authorized to write the class in PA before surplus lines placement.

Trust/escrow handling of surplus lines premium is governed by the producer's fiduciary duties; commingling with general business funds is prohibited.

Pennsylvania producer licenses are issued by the PA Insurance Department; a resident license requires the applicable prelicensing education and passing exam.

Nonresident producers qualify for licensure through reciprocity based on the home state license in good standing; no separate PA exam is required.

Renewal cycle for PA producer licenses is biennial, keyed to the licensee's birth month or the Department-assigned renewal date on the license record.

A producer must report a change of name or address to the Department within the timeframe set by statute/regulation; failure can result in a lapsed or nonrenewed license.

Appointments: an insurer appoints a producer to act on its behalf; appointment and termination notices are filed with the Department through the insurer.

A producer may not transact insurance for an insurer without a valid appointment where appointment is required, and must not commingle appointment with licensure status.

License lapses: continuing to transact business after expiration is unlicensed activity subject to civil penalty and possible criminal exposure.

Business entity licenses require a designated licensed responsible producer; the entity license does not substitute for individual producer licenses.

PA resident producers must complete 24 credit hours of approved continuing education every two-year license term.

At least 3 of the 24 credit hours must be in ethics instruction approved by the Department.

Credit is granted only for courses approved by the PA Insurance Department and completed within the current license term; carryover of excess credits is limited.

Producers holding multiple lines must satisfy CE for each line of authority held, subject to Department rules on duplicate credit.

Nonresident producers generally satisfy PA CE by meeting their home state's CE requirement, provided the home state grants reciprocity.

CE compliance is attested at renewal; failure to complete CE blocks renewal and may require late completion plus penalty before reinstatement.

Instructors and course authors may receive CE credit for teaching or developing approved courses, subject to Department limits on such credit.

Records of course completion must be retained by the producer and are subject to audit by the Department.

Surplus lines placement requires a diligent search: the risk must be declined by or unavailable from admitted insurers authorized in PA for that class.

Surplus lines policies must carry the required notice/disclosure language stating the insurer is not licensed in Pennsylvania and is not protected by the PA guaranty fund.

Unauthorized insurers are not members of the Pennsylvania Insurance Guaranty Association; claims against them have no guaranty fund backstop.

Premium tax on surplus lines is collected from the insured/producer and remitted as required by statute; failure to remit is a violation.

Producers must maintain records of the diligent search, placement, and premium for the period required by regulation and produce them on Department examination.

Notice obligations: the Department issues notices and bulletins that bind licensees when published; compliance is measured against the notice effective date.

Prohibited acts include rebating, misrepresentation of policy terms, and placement with a non-eligible surplus lines insurer.

The Department may examine licensees and impose penalties, license suspension, or revocation for violations of the Insurance Code and regulations.