SURPLUS LINES BROKER: License Compliance

All insurance professionals (both residents and nonresidents) can apply for licenses, renew licenses, and update addresses and phone numbers online through the National Insurance Producer Registry (NIPR), at www.nipr.com.  

NIPR license and renewal applications are easy to complete, and we can usually process them faster than applications that are mailed to us. NIPR charges a small transaction fee (around $5 to $7) to process a license application and fee payment.  Many people have found that overall, the added convenience plus the time and postage savings are worth paying the fee. 

USE NIPR FOR FREE to change an address, e-mail address or phone number!

Business-related Requirements

A surplus lines broker must observe the following business-related requirements (not an exhaustive list):

  • A broker must not procure surplus lines insurance coverage unless the Department of Insurance ("Export List") or the broker (after diligent effort) determined the coverage is not procurable from an Arizona-authorized insurer.  "Diligent effort" means "...having sought insurance for the same risk from at least three insurers authorized in [Arizona] to write the particular insurance coverage or type, class or kind of insurance."  ARS §§ 20-401(4), 20-409.
  • The broker may only procure surplus lines coverage from a qualified unauthorized insurer ("White List" or "NAIC List of Qualified Unauthorized Insurers").  ARS § 20-413.
  • Arizona law specifically bars a broker from placing coverage with an unauthorized insurer for the purpose of securing more advantageous rates or policy terms.  ARS § 20-407.
  • A broker must retain records of each surplus lines transaction until at least 3 years after the expiration or cancellation of the insurance policy.  ARS § 20-414.
  • A broker must transmit data concerning surplus lines transactions to The Surplus Line Association of Arizona (www.sla-az.org) by or before legal due dates.  ARS §§ 20-408, 20-415.
  • A broker must pay taxes on transactions by or before legal due dates.  ARS §20-416.

Licensing-related Requirements

Among other requirements, a surplus lines broker must remain in compliance with the following licensing-related requirements:

Administrative Order 13A-071-INS

PROPERTY AND CASUALTY RATE AND FORM FILING EXEMPTIONS; COMMERCIAL NON-CANCELLATION RESTRICTION EXEMPTIONS; RECOGNIZED SURPLUS LINES

List of Domestic Surplus Lines Insurers

Surplus lines brokers must place business with an Arizona-authorized insurer when insurance is procurable from an authorized insurer.  When insurance is not procurable from an authorized insurer, a surplus lines broker may procure coverage from a Domestic Surplus Lines Insurer, from an insurer on Arizona's List of Qualified Unauthorized Surplus Line Insurers, or from an insurer on the NAIC Quarterly Listing of Alien Insurers.

List of Qualified Unauthorized Surplus Line Insurers

Surplus lines brokers must place business with an Arizona-authorized insurer when insurance is procurable from an authorized insurer.  When insurance is not procurable from an authorized insurer, a surplus lines broker may procure coverage from a Domestic Surplus Lines Insurer, from an insurer on Arizona's List of Qualified Unauthorized Surplus Line Insurers, or from an insurer on the NAIC Quarterly Listing of Alien Insurers.

Form L-177: Report of a Change to Members, Officers or Directors

A business entity must report a change to the entity's members, officers, directors or designated responsible producer within 30 calendar days of the change.  A business-entity bail bond agent must also furnish a fingerprint card and $22.00 for each new officer.

Form L-193: Certificate of Assumed Name

Use this form for each name, other than your genuine legal name, that you intend to use in conjunction with your insurance business.  If you have established a business entity and want to use the name of the business entity in conjunction with your insurance transactions, the business entity must also hold an insurance license. 

Form L-CHG: License Information Change

Individuals needing to update address, phone and e-mail information must use the NIPR Contact Change Request (www.nipr.com) instead of using this form.  An individual may use this form to report a name change, and a business entity may use this form to report a change of Designated Producer, name, address, phone number or e-mail information.  

Form L-CLR: Clearance Letter Request

Use this form if:

A.  You are relocating to another state and need to provide a clearance letter from Arizona, OR

B.  You want to permanently surrender insurance license authority.  Be careful!  If you surrender insurance license authority, Arizona law prevents you from reapplying for the surrendered authority for one year. 

Form L-FPV: Fingerprint Verification

This form is to be used by individuals who are required to submit fingerprints as part of an insurance license application. The form includes detailed instructions that must be exactly followed for fingerprints to be accepted by the Department of Insurance.

Form L-LOC: Branch Locations

Self Service Storage Agents and Rental Car Agents must specify all office locations from which the entity may transact insurance business.

ARS § 41-1030(G) requires most Arizona government agencies to prominently print the provisions of ARS § 41-1030(B), (D), (E) and (F) on all license applications.  The following is the language in ARS § 41-1030(B), (D), (E) and (F):

B.        An agency shall not base a licensing decision in whole or in part on a licensing requirement or condition that is not specifically authorized by statute, rule or state tribal gaming compact. A general grant of authority in statute does not constitute a basis for imposing a licensing requirement or condition unless a rule is made pursuant to that general grant of authority that specifically authorizes the requirement or condition.

D.        This section may be enforced in a private civil action and relief may be awarded against the state.  The court may award reasonable attorney fees, damages and all fees associated with the license application to a party that prevails in an action against the state for a violation of this section.

E.        A state employee may not intentionally or knowingly violate this section.  A violation of this section is cause for disciplinary action or dismissal pursuant to the agency’s adopted personnel policy.

F.         This section does not abrogate the immunity provided by section 12-820.01 or 12-820.02.

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