Fill a Valid Delaware Sl Form

Detailed Guide for Filling Out Delaware Sl

Filing out the Delaware SL form, formally known as Form SL-1904, is a critical process for insurance professionals operating within the surplus lines segment in Delaware. This document is essential for maintaining compliance with 18 DEL. C., §1915, as it showcases due diligence in attempting to place coverage with authorized insurers before resorting to surplus lines insurers. Notably, this form is not submitted to the Delaware Insurance Department but is retained by the surplus lines broker or agent for a period of five years for inspection on demand. Following the outlined steps carefully will ensure that the form is completed accurately and thoroughly.

1. Selection of the Submitter: At the top section of the form, indicate whether it's being submitted by a Delaware Insurance Department Producer or a Surplus Lines SL Broker by checking the appropriate box.
2. Policy Information: Enter the policy number, the name of the surplus lines insurer, and its NAIC number in the designated fields.
3. Insured's Information: Fill in the name and mailing address of the insured. Ensure accuracy to avoid issues with policy documents.
4. Policy Term: Specify the effective date and expiration date of the policy using the MM/DD/YYYY format for both dates.
5. Amount of Insurance: Indicate the amount of insurance for both property and casualty in the appropriate boxes.
6. Location of Risk: Input the location where the risk is being insured.
7. Description of Coverage: Provide a detailed description of the coverage being sought through the surplus lines insurer.
8. Diligent Effort Declaration: Confirm the diligent effort made to procure the insurance from authorized insurers by signing under the declaration. It involves listing the licensed insurers that declined the risk, including their names, NAIC numbers, contact information, and reasons for declining.
9. Explanation to the Insured: Verify that you have communicated to the insured that their coverage is with an insurer not authorized in Delaware and the implications thereof.
10. Producer/SL Broker Information: Fill in the name of the agency or individual, including the Delaware license number. Choose the appropriate designation: Agency or Individual.
11. Signature and Date: The licensed producing agent or surplus lines broker must sign the form and provide the date of signing.

Once the form is fully completed and signed, it should not be sent to the Delaware Insurance Department but retained within the broker's records, ready for inspection if requested by the Commissioner. This process underscores the regulatory environment surrounding surplus lines insurance in Delaware and emphasizes the importance of thorough documentation and compliance.

1. What is the Delaware SL form?

   The Delaware SL form, formally known as Form SL-1904 v.06-2, is a document used by licensed producing agents and surplus lines brokers in the State of Delaware. This form is a statement of diligent effort, attesting that a comprehensive search was made to procure specified insurance coverage from licensed insurers before resorting to obtaining insurance from surplus lines insurers. Surplus lines insurers are not licensed in Delaware but are allowed to provide coverage for risks that licensed insurers decline. The form requires information about the policy, the insurer, and the insured, along with a declaration of diligent effort to find coverage from licensed insurers.

2. Who needs to sign the Delaware SL form?

   The SL form must be signed either by the licensed producing agent who sought the insurance coverage or the surplus lines broker who arranged the coverage. After signing, the completed form must be retained by the surplus lines broker as part of their records and must be readily available for examination by the Commissioner of the Delaware Insurance Department for five years following the issuance of the related coverage.

3. Do I need to submit the Delaware SL form to the Insurance Department?

   No, the Delaware SL form should not be submitted to the Insurance Department. Instead, it is a document that surplus lines brokers or producing agents are required to sign and retain within their records. The form serves as proof of the exhaustive search performed to secure insurance coverage from licensed insurers before resorting to a surplus lines insurer. It must be kept open for examination by the commissioner to ensure compliance with Section 1915 of Title 18 in the Delaware Code.

4. What are the consequences of not diligently seeking coverage from licensed insurers before resorting to surplus lines?

   If a licensed producing agent or surplus lines broker fails to make a diligent effort to seek coverage from licensed insurers, it violates Delaware insurance regulations, specifically 18 Del. C., §1915. Such non-compliance could lead to regulatory actions against the broker or producer, including fines and, potentially, the loss of their license to operate within the state. This diligent search ensures that the insured has access to the best possible insurance options and maintains the integrity of the insurance procurement process.

When filling out the Delaware SL form, individuals often make mistakes that can lead to complications or delays in securing insurance coverage. Understanding these common errors can help in ensuring the process is completed accurately and efficiently.

First, a common mistake is not signing the form where required. Since the form must be signed by the licensed producing agent and forwarded to the licensed surplus lines broker, or signed and retained by the SL broker, overlooking this step can invalidate the submission.

Second, individuals frequently miss the instruction that the form should not be submitted to the insurance department. This detail is crucial for the proper processing of the form within the required legal and procedural framework.

Third, inaccurately recording the policy number or leaving it blank is a mistake that can lead to confusion and delays. The policy number serves as a critical identifier for the insurance coverage.

Fourth, filling in the insurer name or NAIC number incorrectly. These details are vital for the identification of the surplus lines insurer and incorrect information can cause significant issues in the insurance coverage's validation process.

Fifth, individuals often make the mistake of not providing complete or accurate insured’s name and mailing address. This information is essential for proper record-keeping and communication.

1. Listing the policy term dates in the wrong format or inaccurately calculating the term can lead to misunderstandings regarding the insurance coverage period.
2. Underreporting or inaccurately describing the amount of insurance for property and casualty can affect the validity and adequacy of the coverage.
3. Failing to properly describe the location of the risk can result in inadequate assessment and management of the insurance coverage provided.
4. Incorrectly describing the coverage or leaving out important details about the insurance can lead to a mismatch in expectations and actual insurance provided.

In addition to these specific mistakes, failing to make a diligent effort to procure insurance from licensed insurers, as declared under the penalties provided by law, can pose legal issues. Also, not properly informing the insured that the insurance company is not authorized in Delaware and the implications thereof is a critical oversight.

• Not listing the licensed insurers that declined to insure the risk or not providing detailed reasons for their declination can weaken the validity of the diligent search claim.
• Omitting the stamping requirement that indicates the insurance contract is issued pursuant to Delaware Insurance Laws by an insurer not licensed by the Delaware Insurance Department can also lead to compliance issues.

Ensuring each of these areas is addressed with attention to detail and accuracy can significantly streamline the process of securing surplus lines insurance in Delaware, while also maintaining compliance with relevant codes and regulations.

When processing the Delaware SL form, which is pivotal for surplus lines brokers and agents dealing with insurance policies that cannot be procured from licensed insurers within the state, it's often necessary to accompany this document with additional forms and documents. These supplementary materials ensure compliance with regulatory demands and facilitate a comprehensive evaluation of the insurance requirements and the reasons behind resorting to surplus lines insurance.

• Notice of Placement with a Surplus Lines Insurer: This document serves as a formal notification to the insured party, clearly stating that the insurance policy has been obtained from a surplus lines insurer. It outlines the implications, such as the absence of protection under the state’s guaranty fund, emphasizing the insured's understanding and agreement to these terms.
• Surplus Lines Broker Affidavit: An affidavit by the surplus lines broker attests to the diligent search carried out to find appropriate coverage through licensed insurers before resorting to a surplus lines insurer. It documents the broker's efforts and the responses received from the licensed market, serving as a record of compliance with state diligence requirements.
• Proof of Declination from Licensed Insurers: This compilation of written declinations from licensed insurers validates the broker or agent’s claim of inability to place the risk with standard lines. Each declination reflects a decision from a licensed insurer, providing details such as the reason for refusal, thereby substantiating the need to approach the surplus lines market.
• Export List Declaration: Certain states maintain an "export list" that identifies the types of coverages or risks that can be directly placed with surplus lines insurers without the need for a diligent search among licensed insurers. This declaration form identifies whether the particular risk being insured qualifies for inclusion on the export list, streamlining the placement process and confirming its adherence to state-specific regulations.

These documents, when used alongside the Delaware SL form, play a critical role in substantiating the reasons for resorting to a surplus lines insurer and ensuring that all regulatory requirements have been met. They provide a structured way to document the process of securing insurance through surplus lines, ensuring transparency and adherence to the legal standards set forth by the state of Delaware.

The Delaware SL form is closely related to the Evidence of Insurance (EOI) form, which certifies that an insurance policy has been written on the insured's behalf. Both documents serve to confirm details about an insurance contract, such as the policy number, the term of the policy, the amount of insurance, and details about the insured property or risk coverage. The key difference lies in their specific focus: while the SL form is dedicated to surplus lines insurance, implying coverage acquired from non-admitted insurers when it cannot be procured from licensed insurers, the EOI is more broadly applicable across various insurance types.

Another document similar to the Delaware SL form is the Accord Certificate of Insurance, which also verifies the existence of an insurance policy and summarizes the critical aspects of the coverage, such as the insurer's name, policy effective dates, and coverage limits. Like the SL form, it's used to provide evidence of insurance to third parties. However, the Accord Certificate is broader in use across different insurance types and jurisdictions, not just limited to surplus lines or a specific state's regulatory requirements.

The Notice of Cancellation form shares similarities with the Delaware SL form in that both are formal communications related to insurance policies. The Notice of Cancellation informs the insured and/or interested third parties about the cancellation of an insurance policy, detailing reasons and effective dates. Conversely, the SL form documents the due diligence performed to place coverage with a surplus line insurer after attempts to procure it from the standard market have failed. Despite their differences, both documents play vital roles in the insurance communication chain, ensuring parties are properly informed about significant changes to coverage status.

The Delaware SL form and the Insurance Binder overlap in their temporary guarantee of insurance coverage. While the SL form certifies that an exhaustive search for coverage within admitted insurers was conducted before resorting to a surplus line insurer, an insurance binder provides immediate but temporary evidence of insurance before the issuance of a permanent policy. Both are critical in the early stages of establishing coverage, yet the binder is often replaced by a full policy, while the SL form remains a part of the surplus lines transaction record.

Similar to the Delaware SL form, the Declarations Page is an important document that outlines the specifics of an insurance policy, including the insured's name, the policy period, coverage descriptions, and limits. While the Declarations Page serves as part of the formal insurance policy issued upon agreement of coverage terms, the Delaware SL form is used primarily for regulatory compliance and record-keeping in surplus lines insurance transactions. Both documents, however, provide crucial information about the insurance coverage in force.

The Policy Endorsement document, akin to the Delaware SL form, entails modifications to an existing insurance contract. Where the SL form documents the diligent effort to secure insurance from licensed providers before turning to surplus lines, a Policy Endorsement amends the terms or scope of coverage within an existing policy. Both are essential for ensuring the insured's coverage aligns with their needs and regulatory requirements, though they function at different points in the insurance lifecycle.

Lastly, the Non-Admitted Affidavit resembles the Delaware SL form in its relevance to surplus lines insurance. This affidavit is often required by states to confirm that an insured or broker understands that the insurance provider is not licensed by the state and that certain protections, such as guaranty funds, may not apply. While the Delaware SL form includes declarations to similar effect, adding specificity about the diligent search for coverage, both documents ensure regulatory compliance and informed consent in surplus lines transactions.

When filling out the Delaware SL form, it’s crucial to adhere to guidelines that ensure accuracy and compliance. Below are things you should and shouldn’t do:

• Ensure all information is legible and accurate. Mistakes can lead to delays or rejections.
• Have the form signed by the licensed producing agent or the surplus lines broker, as indicated.
• Retain the completed form in your records for five years, as required, for potential examination by the Commissioner.
• Correctly list all licensed insurers approached and their reasons for declining coverage, as this demonstrates the diligent effort made to obtain insurance.
• Inform the insured that the insurer is not authorized in Delaware and about the implications regarding the Delaware Insurance Guaranty Association.

• Submit this form to the Insurance Department. It's for internal record-keeping and compliance verification.
• Leave sections incomplete. Every piece of information requested is essential for the form's legality and completeness.
• Attempt to export the insurance for reasons such as securing lower rates or favorable terms from unauthorized insurers.
• Forget to provide the insured with the stamped evidence of the insurance as required by 18 Del. C., §1909.
• Assume responsibility for the form's submission without understanding the obligations it entails, including confirming that the unauthorized insurer meets the necessary criteria for providing coverage.

Many people have misconceptions about the Delaware Form SL, also known as the Statement of Diligent Effort (Form SL-1904). Let's clear up some common misunderstandings.

• Misconception 1: The form must be submitted to the Delaware Insurance Department. Actually, the form should not be submitted to the Insurance Department. It is meant to be signed and retained by the surplus lines broker or the producing agent as part of their records, open to examination by the Commissioner for five years following the issuance of the related coverage.

• Misconception 2: Only surplus lines brokers need to sign the form. This is incorrect. The form must be signed either by the licensed producing agent who forwards it to the licensed surplus lines broker or signed and retained by the surplus lines broker themselves.

• Misconception 3: The form is optional. In fact, completing and retaining this form is a legal requirement for procuring insurance from non-licensed insurers for risks that licensed insurers won’t cover in Delaware. It serves as proof of diligent effort to obtain coverage from authorized insurers first.

• Misconception 4: Any insurance agent can complete the form. Only licensed producing agents and surplus lines brokers in Delaware are authorized to complete and sign the form as per the requirements outlined in 18 Del. C., §1915.

• Misconception 5: The insured does not need to be informed about the specifics of the coverage. On the contrary, the producing agent or surplus lines broker must inform the insured that their policy is being placed with an insurer not authorized in Delaware. They must make it clear that the insurer is not covered by the Delaware Insurance Guaranty Association and the protections of Chapter 42 of the Delaware Insurance Code do not apply.

• Misconception 6: The form is a universal requirement for all insurance policies. This form is specifically required for situations where an insurance agent has to place coverage with a non-licensed insurer because the risk cannot be insured by authorized insurers in Delaware. It is not a standard requirement for policies placed with licensed insurers.

Understanding these key points ensures that consumers and insurance professionals alike comprehend the importance and proper use of the Delaware Statement of Diligent Effort form.

Understanding the Delaware SL form is crucial for insurance professionals and businesses navigating the surplus lines market. Here are key takeaways to ensure compliance and proper usage:

• Record Retention: The form, once completed, should not be submitted to the Delaware Insurance Department but must be retained for a period of five years. This retention period allows for examination by the Commissioner in relation to the coverage issued.
• Declaration of Diligent Effort: The form requires a declaration that diligent effort has been made to procure the needed insurance from licensed insurers within Delaware. It specifically asks for documentation of at least three declinations from licensed insurers, detailing the reasons for these rejections.
• Informed Consent: It’s mandatory to inform the insured that the coverage being placed is with an insurer not licensed in Delaware. Importantly, this means the insurer is not covered by the Delaware Insurance Guaranty Association, which provides protections for policyholders in the event an insurer becomes insolvent.
• Stamp Requirement: Evidence of insurance provided to the insured must include a stamp stating, “This insurance contract is issued pursuant to the Delaware Insurance Laws by an insurer neither licensed by nor under the jurisdiction of the Delaware Insurance Department.” This stamp is a critical requirement, ensuring that the insured is fully aware of the status and regulatory implications of the insurer providing coverage.

Adherence to these guidelines when filling out and using the Delaware SL form is essential for compliance with Delaware law. It safeguards both the interests of the insured and the integrity of the surplus lines market.