Bill Text: FL S1816 | 2011 | Regular Session | Enrolled
Bill Title: Surplus Lines Insurance
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2011-05-04 - Ordered enrolled -SJ 851 [S1816 Detail]
Download: Florida-2011-S1816-Enrolled.html
ENROLLED
2011 Legislature CS for CS for CS for SB 1816
20111816er
1
2 An act relating to surplus lines insurance; amending
3 s. 626.931, F.S.; requiring a surplus lines agent to
4 file quarterly on or before a specified time an
5 affidavit stating that all surplus lines insurance
6 transacted during the preceding quarter has been
7 submitted to the Florida Surplus Lines Service Office;
8 amending s. 626.932, F.S.; requiring the premium tax
9 due on a surplus lines policy to be computed on the
10 gross premium under certain circumstances; providing a
11 limit on the tax; amending s. 626.9325, F.S.; revising
12 payment dates for the service fee; requiring the
13 service fee on a surplus lines policy to be computed
14 on the gross premium under certain circumstances;
15 creating s. 626.9362, F.S.; authorizing the Department
16 of Financial Services and the Office of Insurance
17 Regulation to enter into a specified type of agreement
18 with other states pursuant to federal law for the
19 collection and allocation of certain nonadmitted
20 insurance taxes; providing terms that may be included
21 in the agreement; requiring the Florida Surplus Lines
22 Service Office to implement an agreement entered into
23 by the department and the Office of Insurance
24 Regulation; providing for application; providing for
25 legislative review of any cooperative reciprocal
26 agreement entered into by the Chief Financial Officer
27 and the office with another state or group of states;
28 authorizing the Legislature to instruct the Chief
29 Financial Officer and the office to withdraw from the
30 cooperative reciprocal agreement if it determines that
31 the agreement is not in the best interest of the
32 state; providing for notice; requiring that the
33 department submit a report to the Legislature;
34 amending s. 626.938, F.S.; requiring certain insureds
35 or self insurers engaging in specified insurance
36 transactions with a foreign or alien insurer to
37 compute the premium tax and service fees based on the
38 gross premium under certain circumstances; providing a
39 limit on the tax; requiring such insureds or self
40 insurers to pay the applicable premium tax to the
41 department and the service fee to the Florida Surplus
42 Lines Service Office on or before a specified time;
43 providing an effective date.
44
45 WHEREAS, the 111th Congress passed the Nonadmitted and
46 Reinsurance Reform Act of 2010 (NRRA), and
47 WHEREAS, the NRRA provides that no state other than the
48 home state of an insured may require any premium tax payment for
49 nonadmitted insurance and defines “home state” as the state in
50 which an insured maintains its principal place of business [15
51 U.S.C. s. 8206], and
52 WHEREAS, as a result of the NRRA, premium tax payments that
53 would otherwise be paid to Florida will be paid to other states,
54 and
55 WHEREAS, the NRRA allows states to enter into a compact or
56 otherwise establish procedures to allocate among the states the
57 premium taxes paid to an insured’s home state, and
58 WHEREAS, the National Association of Insurance
59 Commissioners has adopted an agreement for states to use for
60 that purpose, and
61 WHEREAS, state agreements must be entered into before the
62 expiration of a 330-day period that began on July 21, 2010, to
63 prevent the payment of taxes to such other states pursuant to
64 the NRRA [15 U.S.C. s. 8201], NOW, THEREFORE,
65
66 Be It Enacted by the Legislature of the State of Florida:
67
68 Section 1. Subsection (1) of section 626.931, Florida
69 Statutes, is amended to read:
70 626.931 Agent affidavit and insurer reporting
71 requirements.—
72 (1) Each surplus lines agent shall on or before the 45th
73 day the end of the month next following each calendar quarter
74 file with the Florida Surplus Lines Service Office an affidavit,
75 on forms as prescribed and furnished by the Florida Surplus
76 Lines Service Office, stating that all surplus lines insurance
77 transacted by him or her during such calendar quarter has been
78 submitted to the Florida Surplus Lines Service Office as
79 required.
80 Section 2. Subsection (3) of section 626.932, Florida
81 Statutes, is amended to read:
82 626.932 Surplus lines tax.—
83 (3) If a surplus lines policy covers risks or exposures
84 only partially in this state and the state is the home state as
85 defined in the federal Nonadmitted and Reinsurance Reform Act of
86 2010 (NRRA), the tax payable shall be computed on the gross
87 portion of the premium which is properly allocable to the risks
88 or exposures located in this state. The tax must not exceed the
89 tax rate where the risk or exposure is located.
90 Section 3. Subsections (2) and (3) of section 626.9325,
91 Florida Statutes, are amended to read:
92 626.9325 Service fee.—
93 (2)(a) The surplus lines agent shall pay on or before the
94 45th day following each calendar quarter monthly to the Florida
95 Surplus Lines Service Office the fees related to all policies
96 reported during the previous calendar quarter month in
97 accordance with the plan of operation of the Florida Surplus
98 Lines Service Office.
99 (b) The agent shall pay interest on the amount of any
100 delinquent fees due, at the rate of 9 percent per year,
101 compounded annually, beginning the day the amount becomes
102 delinquent.
103 (3) If a surplus lines policy covers risks or exposures
104 only partially in this state and the state is the home state as
105 defined in the federal Nonadmitted and Reinsurance Reform Act of
106 2010 (NRRA), the fee payable shall be computed on the gross
107 portion of the premium which is properly allocable to the risks
108 or exposures located in this state.
109 Section 4. Section 626.9362, Florida Statutes, is created
110 to read:
111 626.9362 Cooperative reciprocal agreement authorized for
112 collection and allocation of certain nonadmitted insurance
113 taxes.—
114 (1) The Department of Financial Services and the Office of
115 Insurance Regulation may enter into a cooperative reciprocal
116 agreement with another state or group of states for the purpose
117 of, but not limited to, the collection and allocation of
118 nonadmitted insurance taxes for multistate risks pursuant to the
119 federal Nonadmitted and Reinsurance Reform Act of 2010 (NRRA)
120 which was incorporated into the Dodd–Frank Wall Street Reform
121 and Consumer Protection Act, Pub. L. No. 111-203, July 21, 2010.
122 (2) The terms of the agreement may include, but are not
123 limited to, the following:
124 (a) Creating a clearinghouse for the purpose of
125 facilitating the receipt and disbursement of nonadmitted
126 insurance taxes.
127 (b) Specifying requirements and time periods for reporting.
128 (c) Determining methods for the collection and forwarding
129 of nonadmitted insurance taxes to another state.
130 (d) Specifying a premium tax allocation formula for multi
131 state risk nonadmitted insurance.
132 (e) Providing for audits and the exchange of information.
133 (f) Facilitating the administration of the cooperative
134 reciprocal agreement in a reasonable manner.
135 (g) Providing for the collection of a service fee to fund
136 the operations and activities of the clearinghouse which shall
137 not exceed 0.3 percent of the gross premium on transactions
138 processed by the clearinghouse.
139 (3) The Florida Surplus Lines Service Office must implement
140 any cooperative reciprocal agreement entered into by the
141 Department Of Financial Services and the Office of Insurance
142 Regulation under this section and has the authority to collect
143 the total tax imposed on a multistate risk nonadmitted insurance
144 premium.
145 (4) The department and the Office of Insurance Regulation
146 may adopt rules for the administration and enforcement of a
147 cooperative reciprocal agreement entered into with another state
148 or group of states under this section.
149 (5) Notwithstanding any other provision of law to the
150 contrary, this section and any cooperative reciprocal agreement
151 entered into with another state or group of states under this
152 section control the collection and allocation of nonadmitted
153 insurance taxes for multistate risks.
154 (6) The Legislature may, at its discretion, review any
155 cooperative reciprocal agreement entered into by the Chief
156 Financial Officer and the office with another state or group of
157 states. If the Legislature determines that the cooperative
158 reciprocal agreement is not in the best interest of the state,
159 the Legislature shall instruct the Chief Financial Officer and
160 the office to withdraw from the cooperative reciprocal
161 agreement, pursuant to any notice provisions required by any
162 such agreement.
163 (7) Following the negotiation and execution of any
164 cooperative reciprocal agreement entered into by the Department
165 of Financial Services and the Office of Insurance Regulation
166 with another state or group of states, the department shall
167 prepare and submit a report to the President of the Senate and
168 the Speaker of the House of Representatives by January 1, 2012.
169 In addition to describing in detail the terms of any agreement
170 entered into with another state or group of states pursuant to
171 this section, the report must include, but need not be limited
172 to:
173 (a) The actual and projected collections and allocation of
174 nonadmitted insurance premium taxes for multistate risk of each
175 state participating in the agreement;
176 (b) A detailed description of the administrative structure
177 supporting any agreement, including any clearinghouse created by
178 an agreement and the fees charged to support administration of
179 the agreement;
180 (c) The insurance tax rates of any state participating in
181 the agreement; and
182 (d) The status of any other cooperative reciprocal
183 agreements established throughout the country, including a
184 state-by-state listing of passed or pending legislation
185 responding to changes made by the federal Nonadmitted and
186 Reinsurance Reform Act of 2010.
187 Section 5. Subsection (3) of section 626.938, Florida
188 Statutes, is amended to read:
189 626.938 Report and tax of independently procured
190 coverages.—
191 (3) For the general support of the government of this
192 state, there is levied upon the obligation, chose in action, or
193 right represented by the premium charged for such insurance a
194 tax at the rate of 5 percent of the gross amount of such premium
195 and a 0.3 percent service fee pursuant to s. 626.9325. If the
196 policy covers risks or exposures only partially in this state
197 and this state is the home state as defined by the federal
198 Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), the tax
199 and service fee payable shall be computed on the gross premium.
200 The tax must not exceed the tax rate where the risk or exposure
201 is located. The insured shall withhold the amount of the tax and
202 service fee from the amount of premium charged by and otherwise
203 payable to the insurer for such insurance. On or before the 45th
204 day following each calendar quarter Within 30 days after the
205 insurance is procured, continued, or renewed, and simultaneously
206 with the filing of the report provided for in subsection (1)
207 with the Florida Surplus Lines Service Office, the insured shall
208 make payable to the department the amount of the tax and make
209 payable to the Florida Surplus Lines Service Office the amount
210 of the service fee. The insured shall remit the tax and the
211 service fee to the Florida Surplus Lines Service Office. The
212 Florida Surplus Lines Service Office shall forward to the
213 department the taxes, and any interest collected pursuant to
214 subsection (5), within 10 days after receipt.
215 Section 6. This act shall take effect upon becoming a law.
