Surplus Lines FAQ's

For Consumers and Brokers

Table of Contents

What is surplus lines insurance?


Surplus lines insurance is a specialized coverage available from certain insurers not licensed in Massachusetts but approved as surplus lines companies to insure certain risks in the Commonwealth. These companies may be licensed in another state, and not just in Massachusetts. Prior to seeking coverage in the surplus lines market, the risk must have been rejected by admitted insurers, pursuant to Chapter 175, Section 168 of the Massachusetts General Laws. Most risks written in the surplus lines market are distressed, complex, unique, or high-capacity commercial coverages. Because surplus lines companies are not licensed in Massachusetts they are not subject to the State’s regulations in regard to rates and policy forms, giving them the ability to insure unique situations for which coverage is not available in the admitted market. These carriers do not participate in the Massachusetts Insurers Insolvency  Fund, and are otherwise not subject to the Commonwealth’s insolvency laws, but may be some of the largest insurers in the world.

What Massachusetts statute applies to surplus lines business placement?


Massachusetts General Laws (“M.G.L.”) Chapter 175, Section 168 is the statute that regulates the placement of surplus lines insurance in the Commonwealth. Click on the following link to access the statute:

How is surplus lines insurance sold?


Surplus lines insurance can only be procured by specially licensed Massachusetts surplus lines brokers and only from excess and surplus lines insurance companies that have been approved by the Division of Insurance (“DOI”). In addition, prior to procuring coverage in the surplus lines market, a diligent effort must have been made to obtain coverage in the admitted insurance market.

How do I find a surplus lines broker to secure coverage?


If you need to find a surplus lines broker to help you get coverage, we suggest you check the Massachusetts Association of Insurance Agents website. Click on the following link to access their website: On the left side, click on "Find an Independent Insurance Agent In Your Area."


In addition, there is a listing of surplus lines brokers on the DOI website at: 

What is an approved surplus lines insurer?


An approved surplus lines insurer is an unlicensed or non-admitted insurer that has met the Massachusetts’ eligibility requirements established by M.G.L. Chapter 175, Section 168. The insurer must show that it meets numerous requirements regarding capitalization, other financial standards, and operating history, to be approved by the DOI to offer surplus lines insurance in Massachusetts.

Are surplus lines companies as financially stable as admitted companies?


Like admitted companies, non-admitted companies must meet regulator financial scrutiny. In fact, surplus lines companies must meet stringent capital and surplus requirements to be an approved surplus lines company in Massachusetts. A. M. Best, a nationally recognized rating agency, conducts annual research into the insolvencies of both licensed and non-admitted insurers and has consistently validated that the surplus lines market maintains financial performance bettering and solvency rates that are on par with the admitted/licensed market.

Where can I get a list of authorized Massachusetts surplus lines insurers?


The list of approved surplus lines insurers can be found at the DOI website. Click on the following link to access the website: Authorized Massachusetts surplus lines insurers.

What is the premium tax rate on surplus lines insurance written in Massachusetts?


Effective August 10, 2018, the annual premium tax due to the Commonwealth for all multi-state policies written with policy effective dates on or after August 10, 2018 by Massachusetts Special Insurance Brokers for which Massachusetts is the home state of the insured, will be calculated at a flat rate of 4% of gross premium, regardless of whether the risks are located within or outside of Massachusetts.  For multi-state policies written with policy effective dates before August 10, 2018, where Massachusetts is the home state of the insured, Massachusetts risks are to be taxed at the 4% rate while risks located outside the Commonwealth are to be taxed at the rates applicable to that portion of the premium allocated to the respective states or territories.

When and to whom are surplus lines taxes paid?


Surplus lines premium taxes are due by January 31st for business written in the previous calendar year, and are payable to the Commonwealth of Massachusetts. 

Who is responsible for the payment of Surplus Lines Premium Taxes?


M.G.L. Chapter 175, Section 168 stipulates that surplus lines insurance must be placed through a licensed Massachusetts surplus lines broker (“special broker”). The special broker who places the business with the approved surplus lines insurer is responsible for the collection and payment of the surplus lines taxes to the Commonwealth of Massachusetts.

How do I file a surplus lines tax return?


Instructions for filing surplus lines tax returns can be found on the DOI’s website. Click here to access filing instructions.

Questions should be directed to the Surplus Lines Audit Section at (617) 521-7348 or by email to:

Where do I get the surplus lines tax filing forms?


To set up or gain access to your account and download the BR-9 and BR-18 tax reporting forms, contact the NAIC OPTins Marketing Team at 816.783.8787 or email:

If I held a surplus lines license at any time during a particular year and wrote no business...

If I held a surplus lines license at any time during a particular year and wrote no business for that year, do I still have to file a tax return?


As long as you held a license for one day during the year, and even if you wrote no business, you are required to file surplus lines tax return Forms BR-9 and BR-18 indicating zero business written.

Does Massachusetts publish an "export list”?


No, Massachusetts does not publish an export list (an export list is a compilation of coverages or risks that are generally unavailable by admitted insurers and can be exported directly to the surplus lines market).

How do I become licensed as either a resident or non-resident surplus lines broker?


Contact the Division’s Producer Licensing Department by either calling (617) 521-7794 and opting for line #2, or you may email one of the individual staff members by finding his/her name at the following link (click on contact list):

Are any surplus lines premiums exempt from the 4% surplus lines tax?


Yes, premium tax shall not apply to any surplus lines policy issued to the Massachusetts Bay Transportation Authority, Federal Credit Unions when they are the purchaser and tribal lands on reservations. However, the special broker must still make the regular surplus lines filings and, where necessary, note the claimed tax exemption on the form.

If an insured is granted tax-exempt status, is it required to pay the surplus lines tax?


M.G.L. Chapter 175, Section 168 does not specifically exclude tax exempt organizations from paying the surplus lines tax. Responsibility for paying the tax rests with the broker placing the surplus lines policy.

When must I complete and file the disclosure statement Form BR-7 Affidavit by Assured?


Form BR-7 Affidavit by Assured must be filed with the DOI for each new or renewal surplus lines policy within 20 days from the procurement date. Certain “sophisticated commercial insurance buyers” are exempt from the Form BR-7 filing requirement. Click here for a copy of Form BR-7:

The DOI has established an electronic mailbox to which scanned copies of the BR-7 shall be emailed by all special brokers doing business in the Commonwealth. Click here for filing instructions. 

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