In addition to other topics covered on our site, those who report surplus line policies and endorsements in Illinois need to be familiar with all of the following important information.

When filing a policy extension, a renewal certificate, or an annual installment for a multi-year policy, be sure to choose “Policy” as the filing type in the “Filing Type” field of the EFS. This will ensure that all taxes and fees are calculated properly, and that certain return premium endorsements are not rejected. Note that in the Surplus Line Tax, Fire Marshal Tax and Stamping Fee sections of the Procedures Manual, special treatment with regard to these items is required. By choosing “Policy” as the “Filing Type” in the EFS, the system will automatically make the proper calculations for taxes and fees.

The easiest way to enter these items in the EFS is to lookup the original filing on the Your SLAI Filings page and click Renew. That way most of the information will be copied to the Enter a Filing page for you.

For a policy extension, enter it as if it was a new policy (with the same policy number). The effective date should be the first day of the extended period and the term should be the length of the extended period. For example, if the original policy was effective 09/01/2021 for 12 months, and an extension was issued for an additional 3 months, the extension would be entered with an effective date of 09/01/2022 and the term would be 3 months.

For a renewal certificate, enter it as if it was a new policy (with the same policy number). The effective date should be the first day of the renewal period and the term should be the length of the renewal period. For example, if the original policy was effective 05/01/2022 for 12 months, and an renewal was issued for 12 months, the renewal would be entered with an effective date of 05/01/2023 and the term would be 12 months.

For an annual installment of a multi-year policy, enter it as if it was a new policy (with the same policy number). The effective date should be the anniversary of the original policy effective date and the term should be 12 months. For example, if the original 5 year policy was effective 03/15/2022, the first annual installment should be entered with an effective date of 03/15/2023 and a term of 12 months. The second annual installment should be entered with an effective date of 03/15/2024 and a term of 12 months.

When you have acquired an account midterm through a Broker of Record letter (“BOR”), or an account has otherwise transferred midterm from one membership to another, there are a couple of special considerations and requirements.

In these situations, usually the original broker has already filed the policy under their membership. Because our system has internal “firewalls” around each member’s data, when you are logged in under your membership, there is no way the system can access data from any other member during that session. This can cause problems when you go to file endorsements.

When an endorsement is filed, our system looks up the policy filing record to determine the underlying policy effective date. That date is then used to look up the proper tax rates and stamping fee rates. If the endorsement is being filed under your membership but the policy was filed under another member, the system will not find the policy. This can result in taxes and stamping fees being computed incorrectly.

To minimize the impact of this problem, when you acquire an account via BOR, you must do the following:

  • file the policy under your membership;
  • it should be filed as a “policy” using the actual policy effective date and all the actual policy information (except the premium amount);
  • it should be filed with zero premium; and
  • “BOR” or “TRANSFER” (as appropriate) should be entered in one of the User Defined Fields.

By following this procedure, the taxes and stamping fees will be calculated properly on all endorsements entered for this account that your firm acquired midterm via a Broker of Record letter or other type of transfer. It will also help reduce (but not eliminate) issues with return premium endorsements.

Return Premium Endorsement Considerations
There will likely still be instances, when trying to file a return premium endorsement, that the system will reject the filing because there is not enough positive (additional) premium filed for the policy under your membershp to support the negative (return) premium you are trying to file. This is because the original policy premium dollars were filed under a different membership. In these cases, you will need to contact our EFS help desk and they will, after proper review, provide you with an override so the system will accept the filing.

When making an filing based on a binder (in lieu of a policy), you must have a company binder with a policy number (“to be assigned” or “not available” will not suffice as a policy number).  The binder must include the Notice to Policyholder wording and service of suit requirements.  When the policy becomes available you don’t need to file it with the SLAI since you’ve already filed the binder, but you should attach a copy of the EFS filing confirmation page to the policy before delivering it to the insured.

The surplus line law requires that it is unlawful for an insurance producer to deliver any unauthorized insurer contract or premium-bearing endorsement unless it contains evidence of recording by the Surplus Line Association of Illinois.

After reporting a policy or endorsement on the EFS, the system will display a confirmation page with the SLAI Confirmation Number. To comply with the law, you must write or type this number on the first page or declarations page of the policy (or on the endorsement) and label it “SLAI Confirmation #”.

Alternatively, you can print or download the confirmation page and attach it to the policy or endorsement document you are reporting. This is a convenient way to handle it since the confirmation page contains information that helps satisfy the requirements that taxes and fees be shown separately, that the document contain the proper Notice to Policyholder, and that policies have Service of Suit wording.

After reporting the data on the EFS, there is no need to send a paper copy of the document to the SLAI, or to upload an electronic copy.

Be certain that all procurement rules were followed.