Special Lines Surplus Broker ($10,000) Bond - Statewide in California

Brief Summary

This is the $10,000 bond, not the $50,000 one. Special lines' surplus line brokers place only marine, aircraft and interstate railroad business with nonadmitted insurers, and California sets their bond at the broker level under Insurance Code 1760.5. File the right form for your residency and the license moves. If you only work for a licensed special lines entity, you may not need a bond of your own at all.

California Insurance Code 1760.5(b) requires a special lines' surplus line broker to post a bond in the form and amount set by sections 1663 and 1665 for an insurance broker, in place of the $50,000 surplus line broker bond under section 1765. That makes the bond $10,000, written by an admitted surety, continuous in form and in favor of the people of the State of California. The Department of Insurance takes it on form LIC 447-32 for residents and LIC 447-31 for nonresidents.

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How to Apply for a Special Lines Surplus Broker ($10,000) Bond:

• Confirm you hold a California Property Broker-Agent and Casualty Broker-Agent license.
• Nonresidents: confirm you hold a special lines' surplus line broker license in your resident state.
• Decide whether you transact only for a licensed special lines entity. If so, the bond is not required.
• Use form LIC 447-32 if you are a California resident or LIC 447-31 if you are a nonresident.
• Have a California admitted surety execute the $10,000 bond with a jurat and power of attorney, in the applicant's name.
• Sign the bond as applicant and file it with the Department of Insurance along with the license fee.

Detailed Information About the California Special Lines Surplus Broker ($10,000) Bond:

Which bond this is

California has two kinds of surplus line broker licenses, and they carry very different bonds. A general surplus line broker files a $50,000 bond under Insurance Code 1765. A special lines' surplus line broker places only the classes listed in section 1760.5(a): marine and transit risks on hulls, freights, goods and similar property (excluding bridges and tunnels), aircraft or spacecraft insurance, and property or operations of railroads engaged in interstate commerce. Section 1760.5(b) substitutes the broker bond from sections 1663 and 1665 for these brokers.

Amount and conditions

Section 1665 sets the amount at $10,000. The bond is contingent on the broker accounting to anyone requesting insurance for moneys or premiums collected while acting as a broker for insurance other than life. Section 1663 requires an admitted surety insurer, a continuous form and the people of the State of California as obligee.

Forms

The Department of Insurance asks for a Bond of Special Lines' Surplus Line Broker in the penal sum of $10,000 from a California admitted surety, accompanied by a jurat and a power of attorney for the attorney in fact who executes it, completed in the applicant's name and signed by the applicant. Residents use form LIC 447-32. Nonresidents use form LIC 447-31. Business entities file under the same forms.

Who does not file one

An individual special lines' surplus line broker who transacts only on behalf of a licensed special lines' surplus line broker business entity is not required to file the $10,000 bond.

Prerequisites and fees

Applicants need a Property Broker-Agent and Casualty Broker-Agent license, and nonresidents also need a special lines' surplus line broker license in their resident state. Licenses run for two years under Insurance Code 1630. The CDI lists a $1,296 filing fee for an individual with the $10,000 bond on file, $646 for an individual who transacts only for a licensed entity, and $1,296 for a business entity. Renewal fees match.

Eligibility and Requirements for a California Special Lines Surplus Broker ($10,000) Bond:

• California admitted surety.
• Penal sum of $10,000.
• People of the State of California named as obligee.
• Continuous form.
• Jurat and attorney in fact power of attorney attached.

California Special Lines Surplus Broker ($10,000) Bond FAQs:

Official and Additional Resources for the California Special Lines Surplus Broker ($10,000) Bond: