Wyoming Surplus Lines Broker Bond: A Comprehensive Guide
April 6, 2021
This guide provides information for insurance agents to help their customers obtain a Wyoming Surplus Lines Broker Bond
At a Glance:
- Average Cost: Between $100 to $500 per year based on the applicant’s credit
- Bond Amount: $10,000
- Who Needs it: All surplus lines brokers operating in Wyoming
- Purpose: To ensure the public will receive compensation for any damages should the broker fail to comply with licensing law
- Who Regulates Surplus Lines Brokers in Wyoming: The Wyoming Department of Insurance
Wyoming statute 26-11-112 requires all surplus lines brokers operating in the state to obtain a license with the Department of Insurance. The Wyoming legislature enacted the licensing laws and regulations to ensure that surplus lines brokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, surplus lines brokers must purchase and maintain a $10,000 surety bond to be eligible for licensure.
What is the Purpose of the Wyoming Surplus Lines Broker Bond?
Wyoming requires all surplus lines brokers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the broker fails to comply with the regulations set forth in Wyoming statute 26-11-114. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or fails to remit any taxes or fees. In short, the bond is a type of insurance that protects the public if the surplus lines broker breaks licensing laws.
How Can an Insurance Agent Obtain a Wyoming Surplus Lines Broker Surety Bond?
BondExchange makes obtaining a Wyoming Surplus Lines Broker Bond easy. Simply login to your account and use our keyword search to find the “surplus lines” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Wyoming Surplus Lines Broker Bond?
Surety companies will run a credit check on the broker to determine eligibility and pricing for the Wyoming Surplus Lines Broker bond. Brokers with excellent credit and work experience can expect to receive the best rates. Brokers with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the broker’s credit.
How Much Does the Wyoming Surplus Lines Broker Bond Cost?
The Wyoming Surplus Lines Broker bond can cost anywhere between $100 to $500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on the $10,000 bond requirement.
$10,000 Surplus Lines Broker Bond Cost
|Credit Score||Bond Cost (1 year)|
|600 – 624||$250|
|575 – 599||$300|
|500 – 574||$500|
Who is Required to Purchase the Bond?
Wyoming requires surplus lines brokers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Wyoming statute 26-11-103, a surplus lines broker is an individual or business entity that is able to obtain coverage, for Wyoming residents, from insurance companies that are not licensed to conduct business in the state.
Individual producers that contact surplus lines brokerages or managing general agencies to place coverage in non-admitted markets do not need to obtain a Surplus Lines Broker bond or license
How do Surplus Lines Brokers Apply for a License in Wyoming?
Surplus lines brokers in Wyoming must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the Department of Insurance’s licensing page for details on the process.
License Period – All Wyoming Surplus Lines Broker Licenses are valid for two years and expire on the last day of the broker’s birth month
Step 1 – Obtain a Property and Casualty License
Applicants must be a licensed property and casualty (P&C) insurance agent before obtaining their surplus lines broker license. To obtain a license, P&C agents must apply online through Sircon and pass the required exam.
Agents who conduct business under their agency’s name or receive commission payments to their agency must obtain an agency, in addition to their individual, license.
Step 2 – Purchase a Surety Bond
Surplus lines brokers must purchase and maintain a $10,000 surety bond
Step 3 – Apply for a Surplus Lines Broker License
Surplus lines brokers are eligible to apply for licensure after obtaining their P&C license and purchasing a surety bond. The process of obtaining a Surplus Lines Broker License is the same as that for the P&C License. Brokers must submit an application via Sircon and pass the required exam.
How Do Wyoming Surplus Lines Brokers Renew Their Licenses?
Surplus lines brokers can renew their licenses online through Sircon. Brokers must complete 24 hours of continuing education each year to be eligible to renew both their P&C and surplus lines broker licenses. 3 of those hours must be focused on ethics. All Wyoming Surplus Lines Broker Licenses are valid for two years and expire on the last day of the broker’s birth month.
Additionally, brokers must register with SLAS Clearinghouse and report all surplus lines transactions on this platform within 45 days of placing a policy. More information regarding SLAS Clearinghouse and all filing requirements can be found here (the document is housed in Google Drive).
What are the Insurance Requirements for Surplus Lines Brokers in Wyoming?
Wyoming does not require surplus lines brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Surplus lines brokers must purchase and maintain a $50,000 surety bond.
How Do Wyoming Surplus Lines Brokers File Their Bond?
Surplus lines brokers should mail their completed bond form, including the power of attorney, to the following address.
Wyoming Department of Insurance
106 E 6th Ave
Cheyenne, WY 82002
The bond requires signatures from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name
- Date the applicant received their license
- Date the bond is signed
- Notary signatures for the broker and surety company
What Can Wyoming Surplus Lines Brokers Do to Avoid Claims Against Their Bonds?
To avoid claims on their bond, surplus lines brokers in Wyoming must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Pay all required taxes and fees
- Keep records of all transactions performed under the license
- Do not commit fraud
What Other Insurance Products Can Agents Offer Surplus Lines Brokers in Wyoming?
Wyoming does not require surplus lines brokers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable brokers will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Wyoming Surplus Lines Broker Customers?
Wyoming conveniently provides a public database to search for active surplus line brokers in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.