Current
Tax Statements
Jan-Jun 2025 SL Tax Statements have been mailed out. They are due AUGUST 1, 2025, even if you had no activity and even if no tax is due. Read More
The July Newsletter is Live!
SLAI Turned 40! Tax Season is here. Member survey and more. Read More
2022
Public Act 102-0224 / Senate Bill 1753
Senate Bill 1753 passed in the Senate on April 21, 2021 and in the House on May 21, 2021. The governor signed the bill on July 30, 2021 creating Public Act 102-0224. The changes to the law take effect on January 1, 2022. The following changes take effect on January 1, 2022:
Diligent Effort Reform
Commercial Wholesale Transactions Exempt from Diligent Effort Requirements. A licensed surplus line producer may procure surplus line insurance for a commercial insured without making the required diligent effort if the risk was referred to the surplus line producer by an Illinois-licensed insurance producer who is not affiliated with the surplus line producer. This exemption does not apply to personal lines insurance or transactions between a retail and wholesaler who are affiliated.
Annual Diligent Effort for Master Policies. For master policies, the new law specifies that a producer need only make the required diligent effort annually for the master policy, rather than individually for each insured that is added. The diligent effort must include any and all variable provisions of the master policy. The diligent effort must be performed annually, even if the master policy period is greater than one year. A master policy is defined as “a surplus line insurance contract with a single set of general contractual terms that are designed to apply on a group basis to multiple insureds who may or may not be affiliated and who may be added to or removed from the contract throughout the course of the contract period. A master policy may include certain provisions that vary for each insured depending on the insured’s characteristics and the coverage sought.”
Annual Diligent Effort for Program Business. For program business, the new law specifies that a producer need only make the required diligent effort annually for the program, rather than individually for each contract issued under the program. The diligent effort must include any and all variable provisions of the program. The diligent effort for the program must be performed annually, even if some individual policy periods are greater than one year. Program business is defined as “a clearly defined group of insurance contracts procured by a licensed surplus line producer from an unauthorized insurer, under a single agreement between the producer and insurer, for insureds with the same or similar characteristics and containing the same or similar contract terms.”
Fire Marshal Tax Due Date
Annual fire marshal tax statements and payments are now due on the same day as the Jul-Dec surplus line tax statements, February 1st of each year. For a list of Illinois surplus line and fire marshal tax filing due dates, click here.
Elimination of Reporting of Policy Limits
Members will no longer be required to report policy limits when filing policies on the EFS. Beginning with 2022 filings, the field will no longer appear on the EFS “Enter a Filing” screen. For Batch Upload and API filers, the system will still allow reporting of policy limits, but it will no longer be required field.
Clarification of Taxability
Changes in the law clarify that the surplus line stamping fee and any other fees are not subject to tax. They also clarify that non-U.S. premium is not subject to tax.
References to the Term “Countersignature”
The use of the term “countersignature” to refer to the receipt, acceptance and recording of policy and endorsement filings by the Surplus Line Association of Illinois has been eliminated. Instead, this process is now called receiving, accepting and recording so there is no longer any confusion with respect to purchasing groups, which are by law exempt from any “countersignature requirements as provided in” the Insurance Code. This change was intended to clarify that policies and endorsements procured by purchasing groups from unauthorized insurers are subject to the filing, tax and all other requirements set forth in Section 445.
No Penalty for Good Faith Home State Mistake
If the Director is satisfied that a producer made a documented, good faith determination that the home state of an insured was a state other than Illinois, but it turns out that Illinois is the actual home state, the Director can require the filing of the policy and payment of taxes but there is no penalty, interest or late fee.
Disclaimer
The materials and information contained herein are only synopses of laws, regulations and other information and do not constitute legal advice. It is recommended that you consult your legal advisers regarding application of state and federal laws and regulations to any particular situation. The Surplus Line Association of Illinois (SLAI) does not undertake and hereby disclaims any obligation to advise you of any change to laws and regulations or to the SLAI procedures.
2021
Underwriters at Lloyd’s London
Historically, Lloyd’s was able to write insurance in Illinois on both a licensed basis and a surplus line basis. However, they have announced that they will be relinquishing their Illinois license effective
July 1, 2021.
Before July 1, 2021, Lloyd’s Illinois office offered guidance on licensed Lloyd’s issues and filed policy forms and rates, on behalf of Lloyd’s Underwriters, with the Illinois Department of Insurance. Provided the surplus line producer performed the necessary diligent effort to procure coverage from licensed insurers, underwriters could also write business on a surplus lines basis. As of July 1, 2021, however, Lloyd’s will only write on a surplus line basis in Illinois.
Lloyd’s Illinois office is now closed.
For more information, you can call Lloyd’s U.S. at (502) 875-5940. You may also want to visit the Association of Lloyd’s Brokers website.
2017
Non-Admitted Insurance Multistate Association (NIMA)
The Non-Admitted Insurance Multistate Association (NIMA) Board has voted to dissolve and has adopted a timeline to conclude operations by December 2017.
NIMA’s clearinghouse has issued a bulletin with links to access further guidance.
2012
Mexican Auto / Tourist Policies
The Illinois Department of Insurance has indicated that these policies are not subject to Illinois surplus line law, surplus line tax, fire marshal tax, stamping fee or any filing requirements. If you have policies for which taxes were collected but have not yet been paid to the state, contact David Ocasek.
Exempt Commercial Purchaser (ECP) Adjustments
Provisions in the federal NRRA law and in corresponding state statutes require that the minimum threshold dollar amounts in the Exempt Commercial Purchaser (“ECP”) definition be revised on January 1, 2015 and each 5th January 1 thereafter based on changes in the Consumer Price Index. The NAIC Surplus Lines Task Force reviews the required data and determines the percentage change calculation and adjusted minimum amounts for the affected categories as shown below:
| Sub- clause | Category | Previous Minimum | Adjusted Minimum Effective 1/1/2015 | Adjusted Minimum Effective 1/1/2020 | Adjusted Minimum Effective 1/1/2025 |
| (I) | Net Worth | $20,000,000 | $22,040,000 | $23,781,160 | $29,179,483 |
| (II) | Annual Revenues | $50,000,000 | $55,100,000 | $59,452,900 | $72,948,708 |
| (IV) | Annual Budgeted Expenditures | $30,000,000 | $33,060,000 | $35,671,740 | $43,769,225 |
| Change Calculation | 1/1/2015 | 1/1/2020 | 1/1/2025 | ||
| CPI Previous | Sep-2009 215.9691 | Sep-2014 238.0312 | Jun-2019 256.1433 | ||
| CPI Current | Sep-2014 238.0311 | Sep-2019 256.7592 | Jun-2024 314.1753 | ||
| Adjustment Calculation | (238.031 – 215.969) 215.969 | (256-.759 – 238.031) 238.031 | (314.175 – 256.143) 256.143 | ||
| Percentage Change | = .102 or 10.2% | = .079 or 7.9% | = .227 or 22.7% | ||
1 Source: CPI, October 2014, Table 1: Consumer Price Index for All Urban Consumers
2 Source: CPI, October 2019, Table 1: Consumer Price Index for All Urban Consumers
3 Source: CPI, June 2024, Table 1: Consumer Price Index for All Urban Consumers
If you have questions about how these amount apply to the determination of ECP status, please feel free to contact the Association.