§431:8-315  Tax on surplus lines


Published: 2015

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     §431:8-315  Tax on surplus lines.  (a) 

On or before March 15, 2011, each surplus lines broker shall pay to the

director of finance, through the commissioner, a premium tax on surplus lines

insurance transacted by the broker during 2010.  On or before September 15,

2011, each surplus lines broker shall pay to the director of finance, through

the commissioner, a premium tax on surplus lines insurance transacted by the

broker after December 31, 2010, and before July 1, 2011.  After

June 30, 2011, within forty-five days after the end of each calendar

quarter, each surplus lines broker shall pay to the director of finance,

through the commissioner, a premium tax on surplus lines insurance transacted

by the broker during the calendar quarter for insurance for which this State is

the home state of the insured.  The tax rate shall be in the amount of 4.68 per

cent of gross premiums, less return premiums, on surplus lines insurance

allocated to this State.  The tax rate and fees of other states shall be

applied to the gross premiums, less return premiums, allocated to those states.

     As used in this subsection, "gross

premiums" means the amount of the policy or coverage premium charged by

the insurer in consideration for the insurance contract.  Any charges for

policy, survey, inspection, service, or similar fees or other charges added by

the broker shall not be considered part of gross premiums.

     (b)  The commissioner shall collect the taxes

and fees on independently procured surplus lines insurance and from surplus lines

licensees and disburse to the other states the funds earned by each state;

provided that the other state has a reciprocal allocation and disbursement

procedure for the benefit of this State.  To the extent that other states,

where portions of the properties, risks, or exposures reside, have failed to

establish a reciprocal allocation and disbursement procedure with this State,

the net premium tax collected shall be retained by this State.

     (c)  If a surplus lines policy covers risks or

exposures only partially resident in this State, the tax payable shall be

computed upon the proportion of the premium which is properly allocable to the

risks or exposures located in this State.  The taxes and fees payable to this

State on policies that cover risks and exposures only partially resident in

this State shall be remitted on the quarterly schedule established by

subsection (a) to the home state of the insured for disbursement to this State.

     (d)  The tax on any portion of the premium

unearned at the termination of the insurance contract shall be returned to the

policyholder.

     (e)  The commissioner may:

     (1)  Enter into a cooperative agreement, reciprocal

agreement, or compact with other states to facilitate and provide for the

collection, allocation, and disbursement of premium taxes attributable to the

placement of surplus lines insurance;

     (2)  Provide for uniform methods of allocation and

reporting among surplus lines insurance risk classifications;

     (3)  Conform to the requirements of the federal

Nonadmitted and Reinsurance Reform Act of 2010;

     (4)  Share information among states relating to

surplus lines insurance premium taxes; and

     (5)  Utilize a method adopted in cooperation with

other states to allocate risk and compute the tax due on the portion of premium

attributable to each risk classification and to each state where properties,

risks, or exposures are located.

     The commissioner shall assess the insured for the cost of

the cooperative agreement, reciprocal agreement, or compact to collect and

distribute the premium taxes.  Upon application of the insured, the commissioner shall

refund the insured for excess payments of taxes received by the State that are

the result of the statewide tax rate. [L 1987, c 347, pt of §2; am L

2003, c 212, §48; am L 2006, c 154, §10; am L 2011, c 68, §13]

 

Revision Note

 

  The paragraph defining "gross premiums" was moved

from subsection (b) to subsection (a) pursuant to §23G-15.

 

 

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