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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Check whether you owe this bond at all. Insurance Code 1765 exempts an individual licensed as a surplus line broker who transacts only on behalf of a licensed surplus line broker organization, and CDI charges a lower license fee for that path, $646 against $1,296 for the two year term. If you place any surplus line business under your own individual license, the $50,000 bond applies and it has to be on CDI form LIC 447-31.
Insurance Code section 1765 requires a surplus line broker to file a bond to the people of the State of California in the sum of $50,000, conditioned that the licensee will fully and faithfully comply with the requirements of the chapter and all applicable provisions of the Insurance Code, and subject to sections 1662 and 1663. A surplus line broker bond is not required for an individual licensed as a surplus line broker who transacts only on behalf of a licensed surplus line broker organization. The bond is written on CDI form LIC 447-31, Bond of Surplus Line Broker, by an admitted surety insurer, and is continuous in form.
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The figure is flat. Section 1765 sets $50,000 with no tier by premium volume, number of placements, resident or nonresident status, or years licensed. An individual broker and a business entity file the same penal sum.
What varies is whether you file one at all. Section 1765 states that a surplus line broker bond is not required for an individual licensed as a surplus line broker who transacts only on behalf of a licensed surplus line broker organization. If your individual license exists solely so you can transact for your firm, and you place nothing under it yourself, the bond does not apply to you personally. The firm's bond stands behind that business.
The Department prices the two paths differently. For a two year term, an individual resident or nonresident applicant with the $50,000 bond pays $1,296, and one transacting only through a business entity pays $646. A business entity, resident or nonresident, pays $1,296. Those fees are the same for an initial license and a renewal.
The moment you place surplus line business under your own individual license, the exemption is gone and the bond is required.
The obligee is the people of the State of California. Section 1663 requires the bond to be duly executed by an admitted surety insurer, to be continuous in form, and to be in favor of the people of the State of California. Section 1765 conditions it on the licensee fully and faithfully complying with the requirements of Chapter 6 and all applicable provisions of the Insurance Code, and makes it subject to sections 1662 and 1663.
Form LIC 447-31, Bond of Surplus Line Broker, carries the $50,000 penal sum and states that the aggregate liability of the surety on all claims whatsoever shall not exceed the penal sum of the bond in any event. All claims in the life of the bond share the same $50,000.
Form LIC 447-31 requires 30 days notice to the Commissioner, and provides that cancellation does not affect any liability incurred or accrued before the termination of that 30 day period.
The consequence of a lapse is specific and easy to misread. Per the Department, if a surplus line broker's bond expires or is canceled, the licensee keeps an active license but loses the authority to operate as a surplus line broker. You do not get a revocation notice. You simply stop being able to place surplus line business, while the underlying broker-agent license sits there looking fine. Diary the bond separately from the license.
An applicant must be at least 18 and must hold active Property Broker-Agent and Casualty Broker-Agent licenses to qualify for a Surplus Line Broker license. There is no California residency requirement, and nonresidents are licensed on the same terms.
Holding those underlying licenses is a gate, not a substitute. Neither they nor any continuing education completed for them reduces or waives the $50,000 filing.
The application package includes form LIC-050, the Surplus Line Certification, on which the broker declares whether a $50,000 bond will be submitted or whether the broker will transact only through a business entity, form LIC 447-31 for the bond itself, and form LIC 441-11 for a business entity application where applicable. Materials go to the Producer Licensing Bureau, P.O. Box 1139, Sacramento, CA 95812-1139.
The license term is two years, expiring on the last day of the month of issuance two years later. Renewals are handled online through Sircon, and the Department emails renewal notifications, including information about continuing education, to the licensee's registered email address. Because the term is two years and the bond is continuous, the two clocks drift apart easily, which is the most common way brokers end up unbonded without noticing.
No. Insurance Code 1765 states that a surplus line broker bond is not required for an individual licensed as a surplus line broker who transacts only on behalf of a licensed surplus line broker organization. If you also place surplus line business under your individual license, the bond applies.
No. Section 1765 sets $50,000 with no tier by volume, placements, resident or nonresident status, or time licensed, and form LIC 447-31 is printed at that penal sum.
For a two year term, an individual resident or nonresident with the $50,000 bond pays $1,296, an individual transacting only through a business entity pays $646, and a business entity pays $1,296. Those amounts apply to both initial licensing and renewal.
The Department's position is that if the bond expires or is canceled, the licensee keeps an active license but loses the authority to operate as a surplus line broker. Nothing about the underlying license looks wrong, which is why the bond needs its own reminder.
Form LIC 447-31 requires 30 days notice to the Commissioner, and cancellation does not affect liability incurred or accrued before the end of that 30 day period.
No. Form LIC 447-31 provides that the aggregate liability of the surety on all claims whatsoever shall not exceed the penal sum of the bond in any event.
They are a prerequisite, not a substitute. An applicant must be at least 18 and hold active Property Broker-Agent and Casualty Broker-Agent licenses to qualify for the surplus line broker license. Neither those licenses nor the continuing education attached to them waives the $50,000 bond.
No. The Department licenses residents and nonresidents on the same terms, and the fee schedule is the same for both.
Two years, expiring on the last day of the month of issuance two years later. Renewals are processed online through Sircon, and CDI emails renewal notifications with continuing education information to the licensee's registered email address.
Premium is a percentage of the $50,000 penalty, set by the surety after reviewing the applicant's personal credit and, for a business entity, financial statements and time in business. Clean credit and an established agency price at the low end of a surety's filed rates. Weak credit, a new operation, or a prior claim price higher and can require collateral or an indemnitor. No agency can quote a firm rate before pulling credit.
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