§8201 Reporting, Payment, and Allocation of Premium Taxes

Summary

Only an insured person’s home State can make someone pay a premium tax on nonadmitted insurance (insurance from an insurer not licensed in the State). States may make a compact or other rules to share those taxes among States. If those rules are adopted on or before the end of the 330-day period that starts July 21, 2010, they apply to taxes required on or after July 21, 2010. If the rules are adopted after that 330-day period, they apply to taxes required on or after January 1 of the first calendar year that starts after that 330-day period ends. When the 330-day period ends, the NAIC may report to the House Committees on Financial Services and the Judiciary and to the Senate Committee on Banking, Housing, and Urban Affairs about any compacts or procedures adopted. Congress wants each State to adopt uniform nationwide rules, forms, and procedures (for example, an interstate compact) for reporting, paying, collecting, and allocating these premium taxes. A home State may also require surplus lines brokers and insureds who buy insurance on their own to file a yearly tax allocation report showing what part of the premium is for property, risk, or exposure in each State. The insured may authorize someone to file the report and pay the tax on their behalf.