Surplus Lines Section

The Surplus Lines Section regulates the placement of policies and collection of premium taxes on business written in the non-admitted market known as surplus lines. The non-admitted market consists of unlicensed insurers that are determined eligible, based upon financial criteria, to write coverage not available in the general commercial market. The Missouri Property and Casualty Guaranty Association does not cover these companies, and they are not subject to the usual supervision of the Missouri Department of Insurance.

Section 384.043 RSMo permits any individual producer holding a qualified property and casualty license in Missouri to hold a surplus lines license, which includes responsibility to collect taxes due the state. Missouri licensed 341 brokers - 235 Missouri residents and 106 non-residents - in 2002. Surplus lines licensees are required to have a bond of $100,000 or equal to the tax liability for the previous year, whichever is smaller.

An availability report is required from the surplus lines licensee for all placements within 30 days of procurement. Licensees filed 45,248 availability forms in 2002. Each licensee must file an annual tax report by March 1 each year on all surplus lines transactions the previous year. A 5 percent surplus line premium tax is due by April 15. The same applies to any policyholder or self-insurer in Missouri that buys coverage direct from a surplus lines carrier.

Surplus lines premium tax collected in 2002 totaled $13 million. Substantial growth has occurred in the number of filings and taxes paid since 1999.

The list of insurers eligible to write surplus lines coverage in Missouri is published twice a year. The on-line list is updated as changes occur, and related surplus lines forms and licensing applications are available from the website. Call 573-751-0669 with questions regarding surplus lines.