Procedural Updates

“Late Filers Report” & TDI Enforcement Actions

For many years, the Stamping Office (SLSOT) has provided surplus lines agents and the Texas Department of Insurance (TDI) with an annual Late Filers Report, identifying New and Renewal transactions appearing to be filed with the Stamping Office 180 days or more past the policy effective date or issue date, whichever was later. Since the actual statutory requirement for filing with SLSOT is 60 days, policies listed on this report were probably filed well past the legal deadline. The Late Filers Report for the year 2010 is being prepared now; it will be distributed to agents and to TDI and processed under current TDI procedures.

You are probably aware that in mid-2010, TDI began taking formal disciplinary action against agents for failing to timely file with the Stamping Office. These actions take the form of a Commissioner’s Consent Order and include administrative penalties in varying amounts. A finalized enforcement action must be reported to all other states where you hold a license.

Each year, we make every effort to exclude policies from the Late Filers Report that might incorrectly indicate a late filing. Beginning with 2011 filings, you will see the following additional enhancements to the report:

  • You will begin receiving this report monthly, rather than once a year. Also, the report will now show policies processed more than 60 days past issuance or effective date, rather than the 180 days threshold used for prior years. The first monthly report will be sent out in February 2011, reflecting filings processed during the month of January. We believe this will provide you a more immediate opportunity to identify and correct ongoing issues that can contribute to late filings.
  • We will exclude re-entered policies by eliminating the expiration date from the “reversal to re-entry” comparison.
  • We will eliminate any false/positive “late filings” that might be caused by a policy period change endorsement or by unresolved duplicate policy filings.
  • In addition to the number of “late” policies your agency has filed, the report will also include the total number of policies your agency has filed with our office and the percentage of your total filings that are “late” for that reporting period.
  • We will also be changing the column heading “Days” displayed on the report. Currently, this is the number of days from the later of the effective or issuance date when compared to the date filed with the Stamping Office. Beginning in 2011, this will be changed to “Days Late” and will give the actual number of days past the 60-day filing deadline for each policy.

We also plan an enhancement to our Electronic Filing System (EFS). During the first quarter of 2011, a new field will be added allowing the matching of a re-entered policy back to the reversed original filing. By correctly utilizing this new field, agencies will be able to eliminate additional false/positive late filings when the re-entered policy has a different policy number, premium, or effective date than the originally entered filing.

It is important that you do your part as well. Reconcile your reports and look for errors. If you file using the EFS, do not forget to enter the issue date. Make corrections as soon as possible – do not wait. If you file by paper, notify us of any errors as quickly as possible – again, do not wait. Use all the procedures we have in place for the different types of transactions, such as reversals, policy number changes, or policies replacing binders. If you use these correctly, they will not appear on the Late Filers Report in error.

Many of you have procedures in your own offices pertaining to your agency management systems. If you fail to follow those procedures, then the data you download to our EFS may not be submitted correctly. The Stamping Office is required to report the appearance of late filings to TDI. We are unable to change or remove the items that have been identified from the Late Filers Report. We are unable to make your late filing ‘go away’ or grant permission for an ‘acceptable’ late filing. Only the Texas Department of Insurance has the authority to do this.

Filing can be technically complex. Failure to meet the mandates of the Insurance Code can have regulatory consequences for your agency. For that reason, ensure that all employees assigned to filing receive adequate training and that procedures are in place in your office to comply with Texas surplus lines policy reporting requirements. You can avoid unpleasant regulatory actions and costly monetary penalties.

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