Bill Text: FL S1816 | 2011 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Surplus Lines Insurance

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2011-05-04 - Ordered enrolled -SJ 851 [S1816 Detail]

Download: Florida-2011-S1816-Comm_Sub.html

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       Florida Senate - 2011                      CS for CS for SB 1816
       
       
       
       By the Committees on Budget Subcommittee on Finance and Tax; and
       Banking and Insurance; and Senators Fasano and Richter
       
       
       
       593-04524-11                                          20111816c2
    1                        A bill to be entitled                      
    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; amending s.
   11         626.9325, F.S.; revising payment dates for the service
   12         fee; requiring the service fee on a surplus lines
   13         policy to be computed on the gross premium under
   14         certain circumstances; creating s. 626.9362, F.S.;
   15         authorizing the Department of Financial Services and
   16         the Office of Insurance Regulation to enter into a
   17         specified type of agreement with other states pursuant
   18         to federal law for the collection and allocation of
   19         certain nonadmitted insurance taxes; providing terms
   20         that may be included in the agreement; requiring the
   21         Florida Surplus Lines Service Office to implement an
   22         agreement entered into by the department and the
   23         Office of Insurance Regulation; providing for
   24         application; amending s. 626.938, F.S.; requiring
   25         certain insureds or self insurers engaging in
   26         specified insurance transactions with a foreign or
   27         alien insurer to compute the premium tax and service
   28         fees based on the gross premium under certain
   29         circumstances; requiring such insureds or self
   30         insurers to pay the applicable premium tax to the
   31         department and the service fee to the Florida Surplus
   32         Lines Service Office on or before a specified time;
   33         providing an effective date.
   34  
   35         WHEREAS, the 111th Congress passed the Nonadmitted and
   36  Reinsurance Reform Act of 2010 (NRRA), and
   37         WHEREAS, the NRRA provides that no state other than the
   38  home state of an insured may require any premium tax payment for
   39  nonadmitted insurance and defines “home state” as the state in
   40  which an insured maintains its principal place of business [15
   41  U.S.C. s. 8206], and
   42         WHEREAS, as a result of the NRRA, premium tax payments that
   43  would otherwise be paid to Florida will be paid to other states,
   44  and
   45         WHEREAS, the NRRA allows states to enter into a compact or
   46  otherwise establish procedures to allocate among the states the
   47  premium taxes paid to an insured’s home state, and
   48         WHEREAS, the National Association of Insurance
   49  Commissioners has adopted an agreement for states to use for
   50  that purpose, and
   51         WHEREAS, state agreements must be entered into before the
   52  expiration of a 330-day period that began on July 21, 2010, to
   53  prevent the payment of taxes to such other states pursuant to
   54  the NRRA [15 U.S.C. s. 8201], NOW, THEREFORE,
   55  
   56  Be It Enacted by the Legislature of the State of Florida:
   57  
   58         Section 1. Subsection (1) of section 626.931, Florida
   59  Statutes, is amended to read:
   60         626.931 Agent affidavit and insurer reporting
   61  requirements.—
   62         (1) Each surplus lines agent shall on or before the 45th
   63  day the end of the month next following each calendar quarter
   64  file with the Florida Surplus Lines Service Office an affidavit,
   65  on forms as prescribed and furnished by the Florida Surplus
   66  Lines Service Office, stating that all surplus lines insurance
   67  transacted by him or her during such calendar quarter has been
   68  submitted to the Florida Surplus Lines Service Office as
   69  required.
   70         Section 2. Subsection (3) of section 626.932, Florida
   71  Statutes, is amended to read:
   72         626.932 Surplus lines tax.—
   73         (3) If a surplus lines policy covers risks or exposures
   74  only partially in this state and the state is the home state as
   75  defined in the federal Nonadmitted and Reinsurance Reform Act of
   76  2010 (NRRA), the tax payable shall be computed on the gross
   77  portion of the premium which is properly allocable to the risks
   78  or exposures located in this state.
   79         Section 3. Subsections (2) and (3) of section 626.9325,
   80  Florida Statutes, are amended to read:
   81         626.9325 Service fee.—
   82         (2)(a) The surplus lines agent shall pay on or before the
   83  45th day following each calendar quarter monthly to the Florida
   84  Surplus Lines Service Office the fees related to all policies
   85  reported during the previous calendar quarter month in
   86  accordance with the plan of operation of the Florida Surplus
   87  Lines Service Office.
   88         (b) The agent shall pay interest on the amount of any
   89  delinquent fees due, at the rate of 9 percent per year,
   90  compounded annually, beginning the day the amount becomes
   91  delinquent.
   92         (3) If a surplus lines policy covers risks or exposures
   93  only partially in this state and the state is the home state as
   94  defined in the federal Nonadmitted and Reinsurance Reform Act of
   95  2010 (NRRA), the fee payable shall be computed on the gross
   96  portion of the premium which is properly allocable to the risks
   97  or exposures located in this state.
   98         Section 4. Section 626.9362, Florida Statutes, is created
   99  to read:
  100         626.9362 Cooperative reciprocal agreement authorized for
  101  collection and allocation of certain nonadmitted insurance
  102  taxes.—
  103         (1) The Department of Financial Services and the Office of
  104  Insurance Regulation may enter into a cooperative reciprocal
  105  agreement with another state or group of states for the purpose
  106  of, but not limited to, the collection and allocation of
  107  nonadmitted insurance taxes for multistate risks pursuant to the
  108  federal Nonadmitted and Reinsurance Reform Act of 2010 (NRRA)
  109  which was incorporated into the Dodd–Frank Wall Street Reform
  110  and Consumer Protection Act, Pub. L. No. 111-203, July 21, 2010.
  111         (2) The terms of the agreement may include, but are not
  112  limited to, the following:
  113         (a) Creating a clearinghouse for the purpose of
  114  facilitating the receipt and disbursement of nonadmitted
  115  insurance taxes.
  116         (b) Specifying requirements and time periods for reporting.
  117         (c) Determining methods for the collection and forwarding
  118  of nonadmitted insurance taxes to another state.
  119         (d) Specifying a premium tax allocation formula for multi
  120  state risk nonadmitted insurance.
  121         (e) Providing for audits and the exchange of information.
  122         (f) Facilitating the administration of the cooperative
  123  reciprocal agreement in a reasonable manner.
  124         (g) Providing for the collection of a service fee to fund
  125  the operations and activities of the clearinghouse which shall
  126  not exceed 0.3 percent of the gross premium on transactions
  127  processed by the clearinghouse.
  128         (3) The Florida Surplus Lines Service Office must implement
  129  any cooperative reciprocal agreement entered into by the
  130  Department Of Financial Services and the Office of Insurance
  131  Regulation under this section and has the authority to collect
  132  the total tax imposed on a multistate risk nonadmitted insurance
  133  premium.
  134         (4) The department and the Office of Insurance Regulation
  135  may adopt rules for the administration and enforcement of a
  136  cooperative reciprocal agreement entered into with another state
  137  or group of states under this section.
  138         (5) Notwithstanding any other provision of law to the
  139  contrary, this section and any cooperative reciprocal agreement
  140  entered into with another state or group of states under this
  141  section control the collection and allocation of nonadmitted
  142  insurance taxes for multistate risks.
  143         Section 5. Subsection (3) of section 626.938, Florida
  144  Statutes, is amended to read:
  145         626.938 Report and tax of independently procured
  146  coverages.—
  147         (3) For the general support of the government of this
  148  state, there is levied upon the obligation, chose in action, or
  149  right represented by the premium charged for such insurance a
  150  tax at the rate of 5 percent of the gross amount of such premium
  151  and a 0.3 percent service fee pursuant to s. 626.9325. If the
  152  policy covers risks or exposures only partially in this state
  153  and this state is the home state as defined by the federal
  154  Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), the tax
  155  and service fee payable shall be computed on the gross premium.
  156  The insured shall withhold the amount of the tax and service fee
  157  from the amount of premium charged by and otherwise payable to
  158  the insurer for such insurance. On or before the 45th day
  159  following each calendar quarter Within 30 days after the
  160  insurance is procured, continued, or renewed, and simultaneously
  161  with the filing of the report provided for in subsection (1)
  162  with the Florida Surplus Lines Service Office, the insured shall
  163  make payable to the department the amount of the tax and make
  164  payable to the Florida Surplus Lines Service Office the amount
  165  of the service fee. The insured shall remit the tax and the
  166  service fee to the Florida Surplus Lines Service Office. The
  167  Florida Surplus Lines Service Office shall forward to the
  168  department the taxes, and any interest collected pursuant to
  169  subsection (5), within 10 days after receipt.
  170         Section 6. This act shall take effect upon becoming a law.