A Louisiana surplus lines broker bond is required pursuant to Chapter 22 of the insurance regulatory statutes. Louisiana defines a "surplus lines broker" as an insurance producer who solicits, negotiates, or procures a property and casualty policy with an insurance company not admitted to conduct business in Louisiana, and which cannot be procured from insurers licensed to do business in the state." Insurance coverages qualities as surplus lines may ONLY be procured through a licensed broker.
Like the regulatory regimes in other states which license brokers, the Louisiana surplus lines broker bond guarantees that he or she will account for and pay the taxes due on premiums collected in the course of business. The recent liberalization legislation in Louisiana has encouraged excess and surplus lines insurers to do more business in the state, however it has also place further responsibilities on the broker. Rather than solely relying on a "white list", brokers may export based on the E&S carrier's financial stability and its authorized lines. A broker must:
As part of the broker's due diligence in performing the above, there are specific financial requirements that must be met. The broker must clearly understand RS 22:435, and apply this same to practice. The Louisiana surplus lines broker bond guarantees, "prompt payment of all claims arising and accruing to any person by virtue of any policy issued, service agreed to, or fund established by the broker for the payment of which the broker has agreed, and will perform the duties incumbent on him under the provisions of Titles 22 and 23 of the Louisiana Revised Statutes and all other applicable laws". The surety bond must be written in the amount of one hundred thousand dollars ($100,000) and renewed by continuation certificate annually.
Louisiana surety bond leader, Surety One, Inc. is a specialist in the bonding needs of insurance professionals. We offer both surety and fidelity bonds needed by producers, independent brokers, surplus lines brokers and claims professionals in all fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about this surety bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat about your Louisiana surplus lines broker bond or other surety need.
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