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Surplus lines policies can only be placed through a licensed surplus lines insurance producer with registered non-admitted surplus lines carriers. The producer must have an active North Dakota surplus lines producer license prior to the effective date of the policy. The companies: Surplus lines policies can only be written by companies that are registered in North Dakota as a non-admitted surplus lines carrier. For a list of registered surplus insurers, please access this link: surplus lines insurers The surplus lines insurance producer is personally responsible for investigating the financial condition of the non-admitted insurer before placing the insurance therewith. The company must have capital and surplus amounting to at least the amount required of a licensed carrier transacting the same class of business. Acceptable risks: Coverage can only be placed in the non-admitted market if a diligent search has determined the inability to procure the insurance from an insurer authorized to do business in North Dakota. See Appendix I of Article 45-09 of the North Dakota Administrative Code for a list of acceptable categories. Policy endorsement: Every policy must contain the following endorsement: "THIS POLICY IS ISSUED PURSUANT TO THE NORTH DAKOTA SURPLUS LINES INSURANCE STATUTE UNDER THE SURPLUS LINES PRODUCER LICENSE OF______________________________________. THE INSURER IS A QUALIFIED SURPLUS LINES INSURER, BUT IS NOT OTHERWISE LICENSED BY THE STATE OF NORTH DAKOTA AND DOES NOT PARTICIPATE IN THE NORTH DAKOTA INSURANCE GUARANTY ASSOCIATION." The surplus lines insurance producer shall properly complete the endorsement by typing or printing the producer's full name in the space provided and shall sign and date the endorsement. The named producer is responsible for filing the affidavits and paying the premium tax. Recordkeeping: The surplus lines insurance producer is required to keep a separate record of business transacted under his/her surplus lines license. The Commissioner of Insurance may inspect and examine at any time a surplus lines insurance producer's records of business transacted under the surplus lines license. Surplus lines affidavit: Within 60 days of the effective date of the policy, the surplus lines insurance producer is required to complete and file with the Commissioner of Insurance, an affidavit that states that after reasonable diligent search, the risk cannot be placed with a licensed company. Use Surplus Lines Affidavit (SFN 4818). It must be signed by the licensed producer (or designated responsible producer if the licensed producer is a business entity), and the signature must be notarized. The name of the surplus lines producer should read exactly as it reads on the license, on the policy endorsement, and on the annual report. Be sure to mark the affidavit accordingly if it is an endorsement or amendment. The effective date of the policy (number 7) cannot precede the producer's surplus lines license. In number 11, write the number of the category from the list of acceptable surplus lines coverage from Appendix I of Article 45-09 of the North Dakota Administrative Code. If the coverage does not fall under one of these categories, a detailed explanation must be given. The company name in number 13 must appear exactly as it appears on the list of qualifying surplus lines insurers. Do not use the company group name. The penalty for making a false affidavit may include revocation of the producer's license. Annual report and payment of premium tax: On or before April 1 of each year, the producer must file with the Commissioner an annual report for the previous calendar year and must pay the premium tax. If no business was written during the calendar year, a zero report is not required. Use Statement of Taxable Premiums Received on North Dakota Business (SFN 17419), and provide details on Surplus Line Risks (SFN 4824). All policies with an effective date in the calendar year must be included on the report for that year. The premiums cannot be reported on an installment basis, even if the insured is paying on an installment basis. Along with the annual report the surplus lines insurance producer is required to pay the tax. The current rate is 1-3/4 percent and is calculated on gross amount of premium and all assessments and policy fees. Send report and check to: North Dakota Insurance Department 600 E Boulevard Ave, Dept 401 Bismarck, ND 58505-0320 Producers can also submit tax filings electronically through OPTins (Online Premium Tax for Insurance), a product of the NAIC. Contact OPTins at optinsmktg@naic.org or 816.783.8787 to implement OPTins at your company. Visit https://eapps.naic.org/optins-static/ for more information. Failure to make and file the required annual report or to pay the required taxes when due may result in a fine of $25 per day for each day of the delinquency. Applying for a surplus lines license: North Dakota issues Surplus Line Producer Licenses to both resident and non-resident individuals and business entities. All applicants must first be licensed in North Dakota as an insurance producer for the appropriate lines of authority. Both the application for insurance producer and the application for surplus lines insurance producer can be submitted electronically through the National Insurance Producer Registry (NIPR) at www.nipr.com. Electronic filing is mandatory for non-residents. The fee for the producer license is $100 and the fee for the surplus lines license is $10. Effective July 1, 2009, the surplus lines license fee is $100. Non-resident applicants must hold a surplus lines license in their resident state. If the applicant is a business entity, it must also designate an individual principal insurance producer who holds a North Dakota surplus lines license. This individual will be responsible for the filing of the annual report and payment of the premium tax. The business entity should also contact the North Dakota Secretary of State (sosbir@nd.gov or 701.328.4284) to ensure compliance with North Dakota corporate law. License renewal: Surplus lines insurance producer licenses expire on April 30 of every year. Reminders are mailed to the producer in January. The renewal application and $10 fee can be submitted electronically through the National Insurance Producer Registry (NIPR) at www.nipr.com. Effective July 1, 2009, the surplus lines license renewal fee is $25. All North Dakota Surplus Lines Producers must maintain an active North Dakota producer license and non-resident producers must also maintain an active resident Surplus Lines license in their home state. If you are unable to submit your renewal application electronically, print the NAIC uniform application form, complete, sign and date the form and mail it with the renewal fee. If submitting a paper application, we must have an original signature on the application sent by mail to: North Dakota Insurance Department 600 E. Boulevard Ave. Bismarck, ND 58505-0320  |
