Tennessee Alters Surplus Lines Licensing

The expiration date for surplus lines licenses in Tennessee will soon have to coincide with the expiration of an agent’s primary insurance producer license.

All surplus lines license expiration dates will be moved ahead to match the expiration of producer license date. The requirement goes into effect Dec. 31, 2011.

Also, as of Jan. 1, 2012, all surplus lines licenses will be renewed for a two-year period at a cost of $120.

Tennessee Department of Commerce and Insurance spokesperson Shannon Ashford said agents supported the change. “At the request of industry representatives, we changed that licensure to biennial to coincide with the renewal of their of the producer’s license,” said Ashford.

Tennessee lawmakers earlier this year inserted the agent language in a bill designed to implement the federal Dodd-Frank legislation that reformed surplus lines tax collection.

The Tennessee bill made a number of changes affecting agents and surplus lines.

Prior to the new law, regulators could issue a surplus lines license to any authorized agent who has a valid certificate of authority or license from the state’s department of commerce and insurance. The new law revises this section so that the state’s insurance commissioner can issue a surplus lines license to “any licensed insurance agent,” regardless of whether the agent holds a certificate of authority of another license from the department.

Within 30 days of the effective date of a new or renewal surplus lines contract, the agent must make an affidavit that he has been unable to find a similar offer of coverage from an admitted company.

Surplus lines agents on a quarterly basis must file with the state the aggregate gross written premiums they wrote, the amount of aggregate returned premiums, and the amount of tax remitted to the state.

Topics Agencies Legislation Excess Surplus Tennessee