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annualPSLA Annual Meeting to Focus on the Impact of the Multi-Generational Workforce on Surplus Lines

The Annual Meeting of the Pennsylvania Surplus Lines Association will be held at the Double Tree Hotel in King of Prussia, PA on Wednesday, May 8th and Thursday, May 9th, 2013. This year's theme, "Surplus Lines & The Multi-Generational Workforce," will focus on bringing together the many important segments of today's workforce, customers, and markets.

For the first time in our history, four generations are working side-by-side to manage and grow our industry. At this year's PSLA Annual Meeting, please join us as we explore the characteristics of each generation, understand their motivators and learn how to recruit, manage and retain them.

The event will include a panel discussion (submitted for continuing education credit), comprised of the various generations who will discuss how similarities and differences affect the bottom line of their businesses...and yours. Panel members currently include Nick Abraham, President of NAPSLO's Next Generation; Scott Addis of the Addis Group, a retail producer; and Noelle Coldispotti, Executive Director of the risk management and insurance fraternity Gamma Iota Sigma. Jody L. Keller of ParenteBeard, will facilitate the Panel and then provide the keynote remarks with useful tools and resources to implement when dealing with multigenerational issues and opportunities.

Other activities at the PSLA Annual Meeting will include:
  • An update from the Pennsylvania Insurance Department on surplus lines issues and regulations
  • An update on Pennsylvania case law on various lines of business
  • An update from PSLA Executive Director Kenneth Rudert, on the success of the stamping office over the past year and the plans for future activities
  • The opportunity to network with other surplus lines broker and insurance company professionals in attendance
  • Vote for members to serve on the PSLA Board 
Watch your email for registration materials, which will be mailed in the near future.
Sponsorship opportunities are available for the event. Please contact Jeff Henry at PSLA Member Services for more information [email protected], or by calling Jeff at: 610-992-0005.

Learn more about the Convention Hotel
Directions to the Hotel
pslabullitensPSLA Bulletins

Surplus Lines Agent Gross Premium Tax Report
Please click on the following link to review the Surplus Lines Agent Gross Premium Tax Report - RCT-123 as of December 31, 2012 Bulletin and distribute this notice to all surplus lines licensees and anyone else in your agency deemed appropriate.

PA Department of Insurance 1609-PR Form has been revised

The Pennsylvania Insurance Department has updated the 1609-PR form to be used for surplus lines filings, where applicable, for placements made effective January 1, 2013 and thereafter. The revised 1609-PR form can be viewed on our website under Electronic Filing, Filing Forms or by clicking on the following Bulletin 09/11/2012.

The change to the Form will cause the writing producer, representing the insured in a given transaction, to no longer be required to list on the 1609-PR form the minimum of three licensed carriers who have declined the risk as defined. What WILL NOT change are the compliance requirements as stated in Section 1609 of the Pennsylvania Surplus Lines Law as amended July 1, 2011 and Section 124.5 of the Regulations that support the Law. Evidence of this process is still required to be documented in the writing producer's file in the event of future request. The risk is still required to be qualified for entrance into the surplus lines market and the 1609-PR form, as part of the total filing, will continue to be made available for public viewing as it has in the past.

Changes to the RCT-123 Gross Premium Tax Form for 2012

Bulletin 12/11/2012 reflects recent changes have also been made to the 2012 RCT-123 Gross Premium Tax form. This form is used to remit collected surplus lines premium taxes during the fiscal year ending December 31, 2012 and is due to the Department of Revenue by January 31, 2013. It has come to our attention that the revised RCT-123 form, updated by the Department of Revenue for 2012, now requires the tax preparer and the corporate officer to provide their individual social security numbers.

Although this requirement is common on most tax forms, it is not common in electronic filing systems due to security and privacy best practices. It is not the policy of PSLA to collect or retain this type of data as our goal is always to provide maximum security. Therefore, we would advise that all surplus lines licensees make certain to black out or white out both social security numbers from the COPY of the RCT-123 form that is required to be uploaded and submitted into PSLA's Electronic Filing System (EFS) in accordance with Section 1621 of the Surplus Lines Law. This additional information is NOT REQUIRED when filing the COPY with PSLA in to the EFS.

Be advised that PSLA's EFS has been enhanced, subject to Insurance Department approval, to further restrict access to an uploaded RCT-123 image. These changes are being put into effect to protect the surplus lines agency.

When reviewing the RCT-123 form for 2012 as posted on the Department of Revenue's website, you will notice a number of other changes. Many of these changes were a cooperative effort proposed by PSLA and the Insurance Department. We believe that you will find the changes helpful in preparing the appropriate information for filing surplus lines premium taxes for 2012. A number of these changes have been recorded and suggested by PSLA in the course of working with you, the surplus lines licensees. We will keep you advised as events take place on this issue.

eligibleEligible Insurers List Update       


The PA Insurance Department has posted an updated list of Eligible Insurers approved to transact business in Pennsylvania. Please click here for the current list as of January 19, 2013.

foreignNot a "Foreign Concept" PSLA Continuing Education Session to Focus on Managing Foreign Risks

If a policyholder buys, sells or travels outside of the United States or Canada, you may have very good reason to be uneasy. Not only do most US policies have significant coverage restrictions relative to activities outside of the US and Canada, customers traveling abroad often find themselves in tenuous situations where assistance is needed. These could include the need for medical assistance, repatriation, evacuation/extraction, terrorist concerns, injury or damage to property of others, damage to goods and many other issues most persons do not consider until it happens to them.

This on-line live webinar will keep you and your retail producers prepared for the new insurance considerations in our global marketplace. We invite all PSLA members, their employees and customers to participate in this informative session.

CE Class Details

DATE: Wednesday, February 20, 2013

TIME: 9:00 am - 12:00 pm

Instructor: Rosemarie M. Marshall, ARM, AAI, CIW is the Senior Vice President & Co-Leader of the Small Business Practice Group at AAMGA member AmWINS Brokerage of Texas, Inc.

Web Conference Locations: Exton, King of Prussia, Chadds Ford, Harrisburg, Greensburg, Warrendale (Pittsburgh Area), and Philadelphia

Fee: PSLA Members - $40; Non-Members - $55

Click here for Course Description.
Click here for the Registration Form.
prewebinarA Pre-Webinar Primer on Underwriting International Risk Exposures
By: Rosemarie Marshall- ARM, AAI, CIW

We hear over and over how the world is getting smaller, that the globalization of the world economy brings us closer.  Email, Facebook, Twitter, Satellite TV, the internet - these communication methods and social media outlets shorten distances and bridge cultural differences.  Working in the global economy is no longer confined to the Fortune 500 companies, as even small firms are creating opportunities to sell their products and services on an international stage. As surplus lines professionals in this environment, we are removed from the ultimate insurance buyer, but not from the inherent challenges of working in a fast paced international environment.

Our first challenge is assisting our retail customers with identifying just where these international exposures exist. Reviewing a prospective insured's website often offers the first clues of a potential international exposure.  Sometimes the home page proudly announces the international work, but often some detective work is needed.  One item to check is if the company sells goods over the internet.  An internet sales site makes it very easy to attract customers from around the world and raises the probability of a products liability suit being brought in another country.  There may be a list of past clients or jobs on the website that suggest an overseas connection.  

Additional questions as to the scope of the operation will determine how best to fill any gaps in the current insurance program.  While some issues may be addressed by extensions to existing domestic policies, there are advantages to a separate foreign program.  The availability of separate limits is an obvious component, but foreign policies also provide coverage enhancements not typically included in domestic policies.  

Underwriting and rating of a foreign program is similar to the domestic program with the added information of knowing exactly in what countries the insured will be working.  General liability and automobile liability limits are structured the same way as in a domestic policy and coverage can be tailored to the specific needs of the company. If there has been no prior foreign coverage in place, loss runs on the domestic program will be evaluated.  The number of employees working overseas or across the border, where they are working, what they are doing, and how many days they spend overseas are other rating criteria.  

As surplus lines brokers, it's important to provide the retail agent the tools necessary to sell the foreign insurance program, as often insureds don't see the need to buy more insurance. The CE Webinar will offer a more comprehensive discussion of the very large and real foreign exposure for many U.S. companies, even very small companies. As surplus lines professionals, we play a vital role in bringing the exposures to the attention of our retail clients and guiding them through a thought process to help their insureds fill gaps in their insurance program.

Join me on the PSLA's webinar on February 20th, and we'll explore some of these unique issues and opportunities together.

onlineeducationPSLA On-Line Education Portal


Did You Know...


The PSLA has secured a portal of on-line insurance and insurance related classes for its members to take whenever they wish, and from wherever they may be at any time? Click here for all the details: Education - Online Course Options 

When realizing at the last minute that I was a few credits short and no CE classes scheduled, I was directed to PSLA's Online Education. It was easy, to find and select a course, go through the material, take the test and done! I had the credits I needed to renew my license with little effort and in the comfort of my office computer. Who could ask for anything more!!

I would suggest that everyone try the Online Education offered by PSLA at least once, you may find yourself doing it again.

Diane Bell, Underwriter, Pennock Insurance, Inc.
wholesaleAre Wholesale Brokers Liable to the Policyholder?
California Ruling Has Implications

 In a case that may have broad ranging implications for the industry, the law in California now has been established that a surplus lines wholesale insurance agent or broker - that did not have binding authority - may still have a duty to the insured policyholder, notwithstanding the fact that it had no contact, contract or ability to change the terms and conditions of the transaction.
The facts in the underlying claim involve a plaintiff who was the subject of a shooting at a bar that initially sued the facility and its security guard company, claiming that they should have prevented the shooting. After settling the claims with the security guard company pursuant to an assignment of rights and a covenant not to execute, the underlying plaintiff brought a lawsuit against the Burlington Insurance Company, claiming that the insurer had committed bad faith by denying coverage for the underlying lawsuit against the security guard company based on an assault and battery exclusion in the policy. The trial court, however, found the exclusion to be conspicuous and enforceable and granted summary judgment in favor of Burlington Insurance Company.
Another defendant in that lawsuit was Hull & Company, the surplus lines wholesale broker. The plaintiff brought suit against the broker claiming to have standing based upon the same assignment of rights. Plaintiff argued that the wholesale broker owed a duty of care to the security guard company to ensure that the insurance policy covered the underlying lawsuit against the security guard company, and claimed the wholesale broker breached its duty of care to the security guard company and, by extension to the plaintiff. While finding the insurance policy exclusion to be enforceable, the trial court, in response to the broker's summary judgment action, held that there was a triable issue of fact as to the duty of care of the wholesale broker, thus warranting a jury trial.
Hull & Company's writ of appeal of the trial court's ruling to the Superior Court of California was denied. It then petitioned the Court of Appeal of California, Second Appellate District, to consider the appeal, which was also rejected. A writ of appeal was then taken to the California Supreme Court. The AAMGA, along with the California Insurance Wholesalers Association, California Surplus Lines Association, Council of Insurance Agents & Brokers, and NAPSLO, joined together to support the petition the Supreme Court of California to hear the appeal.
The briefs submitted to the court on behalf of the industry noted, among other things, that the imposition of the tort duty on the wholesale insurance broker by the trial court conflicts with the vast majority of state jurisdictions that have considered the issue and improperly expands the scope of tort liability under California law. By increasing the risks wholesale insurance brokers face in serving California customers, the tort duty by the trial court will have the practical effect of limiting the availability and increasing the cost of insurance for California businesses. Moreover, this conflict subjects wholesale insurance brokers like Hull, a wholesale broker headquartered in Florida, to potentially unlimited liability whenever the wholesale broker acts on the instructions of a California retail insurance broker. The result also impedes the operation of a national wholesale insurance market to the detriment of California consumers and underscored the need for immediate review by the Court. Unfortunately, the court denied the petitions seeking the appeal thereby leaving the ruling of the trial court and duty imposed on surplus lines wholesale brokers in place for now.
The matter now reverts back for a full trial on the merits of the claim. We will keep PSLA members advised of further developments as they materialize.
naicNAIC Update

The Winter Meeting of the National Association of Insurance Commissioners (NAIC) took place in National Harbor, Maryland, November 28-December 2, 2012. AAMGA Executive Director Bernie Heinze was in attendance at all meetings pertaining to the Wholesale Insurance Industry.
The representative professional trade associations met to discuss the current state of the marketplace. It was agreed that we are all settling into the post-Dodd/Frank era, but uniformity issues and eligibility standards remain a primary issue. The long awaited report on insurance modernization is expected to be received from the Federal Insurance Office by the end of March 2013. It is expected that the report will be critical of the state-based regulatory system of insurance. We expect 3 to 5 main points will form the crux of the report, and that Commissioner Michael McRaith will testify before the US House of Representatives on the points comprising the report after it has been issued.

One of the main issues for opportunity will include the Market Security risk, where one or more nonadmitted insurers or offshore entities seek to slip through the cracks of the NRRA's surplus lines insurer eligibility standards. For surplus lines insurers domiciled in the United States, the insured's Home State regulator must look to the insurer's domiciliary regulator for solvency regulation. For alien nonadmitted insurers, the Home State must rely on the NAIC's International Insurance Department (IID) regarding alien insurer eligibility to ensure Home State consumers.
Prior to enactment of the NRRA, the major surplus lines states separately reviewed the surplus lines insurer's financial condition and reputation to protect their consumers from the risk of unscrupulous nonadmitted insurers. Industry trade associations and state stamping offices as well as individual industry leaders also served as an informal, but real-time network to flag potential market problems for regulators.
The group agreed surplus lines market security under the NRRA needs to be raised with the NAIC and State regulators to develop a consensus as to the appropriate market surveillance standards and procedures to protect the surplus lines market consistent with the provisions of the NRRA. Discussions will take place with appropriate NAIC staff to clarify the specific IID process, how staff members are working with representatives in the US Territories and, particularly, whether there are concerns regarding possible regulatory gaps allowing unscrupulous insurers into the market from offshore locations, and to establish uniformity/eligibility and market security protocols.
The NAIC has already established a Working Group to liaise with industry in regard to better understanding the current state of eligibility standards, and the manner in which the individual states are implementing them. There appears to be a disparity among the various states compared to the manner in which the NRRA envisioned these standards to be uniformly applied. The Working Group has sent out a survey to the states, and we will look forward to working with them further after the responses have been received.
Finally, the Surplus Lines Task Force of the NAIC conducted a brief hearing during the NAIC conference. Among other things, the Task Force also considered a letter from the Securities & Insurance Licensing Association (SILA) with recommendations in regard to a proposal that would seek to reopen various provisions of the Nonadmitted Insurance Multistate Agreement (NIMA), including, developing a uniform definition of "principal place of business"; developing a model allocation arrangement that could be adopted by states that both do and do not participate in a compact; developing a standard schedule for tax reporting and payments; including the definition of exempt commercial purchasers that would, if adopted, replace rather than preempt alternative state definitions; develop a model export list for states to adopt and include a model law and eligibility requirements as established by the NRRA. Discussions will continue with SILA to explore the various issues and opportunities that are part of their proposal.
Finally, Louisiana Insurance Commissioner Jim Donelon was elected as 2013 President of the NAIC at the conclusion of its 2012 Fall National Meeting. Commissioner Donelon succeeds Florida Insurance Commissioner Kevin McCarty, who served as 2012 NAIC President. Click here  for an audio interview with Commissioner Donelon, in which he outlines his priorities for the coming year.
The 2013 NAIC officers are:     
  • President: Louisiana Insurance Commissioner Jim Donelon
  • President-Elect: North Dakota Insurance Commissioner Adam Hamm
  • Vice President: Montana State Auditor and Commissioner of Securities and Insurance Monica J. Lindeen
  • Secretary-Treasurer: Pennsylvania Insurance Commissioner Michael F. Consedine
The newly elected officers assumed their duties on January 1, 2013.
naic2NAIC to Consider Surplus Lines Insurer Eligibility Standards

The surplus lines industry trade associations continue their efforts to educate the NAIC on the necessity to implement uniform eligibility standards for surplus lines insurers. On January 9, 2013, a joint letter was sent by AAMGA, PCI, CIAB, AIA, NAPSLO and PIA to the Surplus Lines Task Force, which - at its November meeting had requested a list of documentation the industry believes is appropriate to validate the eligibility criteria established by the NRRA which support strong financial regulatory oversight.

The letter stated that the surplus lines industry benefits from strong carrier solvency regulation and, therefore, the industry supports strong solvency review by domiciliary states for US domestic surplus lines carriers. As previously noted, the intent of the NRRA was to modernize surplus lines regulation and establish uniform national criteria for determining the eligibility of surplus lines companies to write surplus lines insurance. As a consequence, this initiative needs to be advanced with a degree of urgency.

The letter also noted that the NRRA:
  • unambiguously restricts the eligibility requirements a state may impose on nonadmitted insurers,
  • requires that a state may not impose eligibility requirements on, or otherwise establish eligibility criteria for, nonadmitted insurers domiciled in a United States jurisdiction, except in conformance with such requirements and criteria in the NAIC's Non-Admitted Insurance Model Act sections 5A(2) (the insurer is authorized to write the type of insurance in its domiciliary jurisdiction), and 5C(2)(a) (the insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of: (i) the minimum capital and surplus requirements of domiciliary jurisdiction; (ii) $15,000,000).
  • clearly defines criteria for carrier eligibility compliance requirements, so States should not impose additional requirements beyond the NRRA, and states that exceed the NRRA requirements should change their practice in accordance with the NRRA.   
  • limits and restricts the types of requirements that states may impose on the surplus lines industry and on surplus lines transactions. State regulators retain the ability to access filings stored in the NAIC's centralized financial database.
  • requires that a state may not prohibit a surplus lines broker from placing nonadmitted insurance with or procuring nonadmitted insurance from a nonadmitted insurer domiciled outside the United States that is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department (IID) of the NAIC. The associations note that they support strong solvency review by the NAIC's IID for alien surplus lines carriers. Because, the federal law provides for the eligibility of alien insurers listed by the IID, regulators should rely on the financial information filed by the carrier with the NAIC's IID, including reports of the insurer's financial condition and financial review conducted by the IID.  
Finally, the letter notes that the US domestic and non-U.S. carriers should be held to the same standards for placing business and demonstrate strong solvency history so as to support a strong surplus lines industry.

This will all be taken up by the Task Force during an upcoming conference call. Any updates will be reported as they are known.
palegisPennsylvania Legislative Updates
The Pennsylvania Legislative Session convened on January 1, 2013 for the constitutionally mandated swearing in ceremony. Legislative Session began in earnest January 14, 2013 and the two-year session will conclude November 30, 2014. The legislature will break in mid-February 2013 for four weeks of budget hearings by the Appropriations Committees of the House and Senate, after which the legislature will remain in session until the annual budget is settled, typically by June 30, 2013.

Political Update

In identifying his priorities for this year, Governor Tom Corbett has highlighted transportation funding, privatization of the state-run liquor system and an on-time budget that contains no new taxes and which addresses the mounting problem of pension obligations. Following the elections in November 2012, Republicans maintained control of both the House (111-92) and the Senate (27-23) although Democrats gained three Senate seats this election cycle. The leaders in all four caucuses remain largely the same.

2013 Key Legislative Issues

Legislative bills are just now being introduced. PSLA will keep members apprised as key issues are introduced and when action is taken.

Workers Compensation Reform

Efforts continue with the Department of Labor and Industry and stakeholders to agree on a set of reforms for a legislative initiative for this year. Workers Compensation reforms are always difficult, so it is critical that consensus is reached between and among stakeholders and the Department before asking the legislature to act. The insurance industry trade associations remain hopeful that legislative action will be successful in 2013.

Asbestos Bankruptcy Trust Reform

An industry lead coalition of stakeholders is seeking legislation that would prevent the gaming of the system between claims in the tort and bankruptcy trust systems. The effort has some leadership support in the House and action on the bill may be seen early in 2013.

Task Force on Child Protection Report

The legislature will be considering recommendations from the report of the Commonwealth Task Force on Child Protection released November 2012, which may provide for a discussion of the reviver issue that allows for a two-year window for child abuse claims otherwise barred by the statute of limitations.

Flex Rating Initiative

The Department of Insurance responded to industry recommendations to advance its rate review process. While still discussing issues with the industry, the Department expressed a desire to continue its current approach of independently recalculating rate filings rather than reviewing them, which will necessitate maintaining the same level of data. The Department indicates that it is already making significant improvements in the rate review process.

Kristen Ortiz Named Legislative Liaison for the Insurance Department

Kristen Ortiz was named Legislative Liaison for the Insurance Department replacing Kari Kissinger who was promoted to Deputy Legislative Secretary in the Governor's Office. Ms. Ortiz previously served as Government Relations Specialist with the Ridge Policy Group. Her professional experience also includes work for the Pennsylvania Service Network for Autism and Intellectual Disabilities and as a legislative assistant to Congressman Todd Platts.

Session Calendar

2013 Insurance Department Budget Hearings
Senate -February 21, 2013
House - February 28, 2013

2013 Legislative Session Schedule
January - 14, 15, 16 (House only)
22, 23,
28, 29, 30 (Senate only)
February - 4, 5, 6, 11, 12, 13
March - 11, 12, 13, 18, 19, 20
April - 8, 9, 10, 15, 16, 17,
22, 23, 24 (House only)
29, 30, 1 (Senate only)
May - 6, 7, 8, 13, 14
June - 3, 4, 5, 10, 11, 12, 17, 18, 19, 24, 25, 26, 27, 28
psladuesPSLA 2013 Dues Are in the Mail

There's never been a more important time than now to ensure you remain a member in good standing in the Pennsylvania Surplus Lines Association. The world of transacting, binding and reporting Surplus Lines insurance business continues to change and improve.

And there's never been a better bargain than sustaining the PSLA's Membership Division, on-line and web-based continuing education sessions; annual meetings and other member benefits.

Be sure to complete and return your membership renewal information along with your dues payment today.

contactContact Us 


Please know all of us are here to assist with any questions or requests for information on matters pertaining to transacting the business of surplus lines insurance in the Commonwealth of Pennsylvania.


Please contact us at:


Question TypeTelephoneEmail
General Information610-594-1340, option 1
Training610-594-1340, option 1
Bulletins610-594-1340, option 0
Electronic Filing610-594-1340, option 1
Filing Review610-594-1340, option 2
Accounting610-594-1340, option 3
Eligible Insurers610-594-1340, option 0
Information Technology610-594-1340, option 4
Membership Services610-992-0005

Mailing Address
Pennsylvania Surplus Lines Association
180 Sheree Blvd.
Suite 3100
Exton, PA 19341

Toll-free (PA only): 888-209-3230
Telephone: 610-594-1340
Fax: 610-594-7623
hearThe PSLA Wants to Hear From You!

You've heard from us - now it's your turn. We love feedback, so please let us know your thoughts on this issue of the PSLA's Newsletter. Did you like it? Were the articles of interest and value to you? We're already planning the next issues, so please let us incorporate your ideas. Kindly direct your comments or questions to [email protected]