20-416. Tax on surplus lines
A. On or before the due date prescribed in section 20-415, each surplus lines
broker shall remit to the state treasurer through the director a tax on the premiums,
exclusive of sums collected to cover federal and state taxes, examination fees and
stamping fees collected pursuant to section 20-167, on surplus lines insurance subject to
tax transacted by the broker during the preceding reporting period, as shown by the
statement of surplus lines business filed with the director. The tax is at the rate of
three per cent of the gross premiums, including policy fees other than stamping fees
prescribed in section 20-167, less premiums returned on account of cancellation or
reduction of premium and shall exclude gross premiums and returned premiums upon business
exempted from surplus lines provisions under section 20-420. The surplus lines broker
shall collect the tax from the insured in addition to the full amount of the gross
premium charged by the insurer for the insurance. The surplus lines broker shall return
the tax on any portion of the premium unearned at the termination of the insurance policy
to the policyholder. The surplus lines broker is prohibited from absorbing the tax and
from rebating, for any reason, any part of the tax or commission.
B. Notwithstanding section 20-415 and subsection A of this section, if a surplus
lines broker fails to timely renew the license held by the broker to transact surplus
lines insurance and the broker's license is revoked by order of the director or the
director accepts the consent to voluntary termination of the license, the broker shall
file a statement of surplus lines business from the end of the last reporting period
covered by the statement filed by the broker through the date the license was last valid
and shall remit all outstanding surplus lines taxes to the director. The broker shall
file the statement of surplus lines business and shall remit any outstanding surplus
lines taxes within thirty days after the nonrenewal, revocation or voluntary termination
of the license.
C. Except as provided in subsection D of this section, for the purpose of
determining the surplus lines tax, the total premium charged for surplus lines insurance
placed in a single transaction with one underwriter or group of underwriters, whether in
one or more policies, shall be allocated to this state in the proportion as the total
premium on the insured properties or operations in this state, computed on the exposure
in this state on the basis of any single standard rating method in use in all states or
countries where the insurance applies, bears to the total premium so computed in all the
states or countries.
D. The surplus lines tax on insurance on motor transit operations conducted between
this and other states is payable on the total premium charged on all surplus lines
insurance less the portion of the premium determined as provided in subsection C of this
section charged for operations in other states taxing the premium of an insured
maintaining its headquarters office in this state or the premium for operations outside
of this state of an insured maintaining its headquarters office outside of this state and
a branch office in this state.
E. Such tax shall be apportioned in the manner provided by section 20-224,
subsection C.
F. All surplus lines taxes collected pursuant to this section are monies that
belong to this state and constitute a debt to this state.
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