Learn about the SL-2 Form and what it is used for.

The SL-2 Document is a diligent search report. This report shows that a broker did the right market research homework and that they are properly placing their policy holders in the non-admitted surplus lines market.
In order to complete this report a broker must have submitted the risk to at least 3 admitted insurers in California before coming to the reasonable realization that the surplus lines market is the correct market for that particular risk.
If you determine that fewer than 3 admitted insurers will actually write the particular risk then you must explain the diligent efforts and knowledge that was gathered in order to make that determination.
Overall, this report is used to help wholesalers and MGAs clarify why the risk was better placed in the surplus lines market so that if the insurance commissioner or his designee conduct an audit they will be able to show that they did their homework and their policy holder risks are well placed.
The surplus lines market was once known as a last resort for brokers, however with all of the recent brushfires and large catastrophic losses, the surplus lines market is becoming more like the best option for a lot of different risk in CA.
Please contact us with further questions on this or any other risk management topic. We will see you again soon!