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Changes made EFFECTIVE 6-13-07
R590. Insurance, Administration.
R590-157. Surplus Lines Insurance Premium Tax and Stamping Fee.
R590-157-1. Authority.
This rule is promulgated pursuant to the general rulemaking authority
vested in the commissioner by Section 31A-2-201, which authorizes rules to
implement the Insurance Code. Specific rulemaking authority is granted by
Subsection 31A-3-303(2) to prescribe accounting and reporting forms and
procedures to be used in calculating and paying the surplus lines premium
tax, and Subsection 31A-15-103(11)(d) to specify the stamping fee amount and
how it is to be collected.
This rule supersedes Rule R590-119 Surplus Lines Stamping Fee.
R590-157-2. Purpose and Scope.
A. The purpose of this rule is to prescribe:
(1) the amount of the stamping fee and;
(2) the accounting and reporting forms and procedures to be used in
calculating surplus lines premium taxes and stamping fees; and.
(3) the authorized entities to examine the transaction and collect and
receive the tax and fee.
B. This rule applies to:
(1) insurers, surplus lines producers, and policyholders who are
jointly and severally liable for the payment of the premium taxes and
stamping fee;
(2) the advisory organization authorized to examine surplus
transactions; and
(3) the commissioner's authorized agent to collect the stamping fee
and premium tax and remit the premium tax to the commissioner.
R590-157-3. Definitions.
For the purpose of this rule the commissioner adopts the definitions
set forth in Section 31A-1-301, and the following:
A. "Courtesy filing" means a surplus lines policy filing done by a
resident surplus lines producer on behalf of a resident or non-resident
producer whose licensure does not include a surplus lines line of authority.
B. "Courtesy filing fee" means a fee charged by the resident surplus
lines producer for doing a courtesy filing for a resident or non-resident
producer whose licensure does not include a surplus lines line of authority.
C
"Stamping fee" means a percentage of policy premium payable for the
examination of a surplus lines transaction as required in Subsection
31A-15-103(11).
[B.]D. "Surplus Line Association" or "Association" means
the Surplus Lines Association of Utah.
[C.]E. "Surplus lines producer" means a person licensed
under Subsection 31A-23a-106(1)(i) to place insurance with eligible
unauthorized insurers in accordance with Section 31A-15-103.
[D.]F. "Surplus lines insurer" means an unauthorized
foreign or alien insurer subject to the limitations and requirements of
Section 31A-15-103, doing business in this state through surplus lines
producers, and included on the commissioner's "recognized" list.
[E.]G. "Surplus lines premium" means the monetary
consideration for an insurance policy procured from an unauthorized insurer,
and includes policy fees, membership fees, required contributions, or
monetary consideration, however designated.
[F.]H. "Surplus lines premium tax" means, as prescribed
by Section 31A-3-301, a tax of 4-1/4% of gross surplus lines premiums, less
4-1/4% of return premiums paid to insureds by reason of policy cancellations
or premium reductions.
[G.]I. "Surplus lines transaction" means the placement
with a surplus lines insurer of an insurance policy or certificate of
insurance. It also means any cancellation, endorsement, audit, or other
adjustment to the insurance policy that affects the premium.
R590-157-4. Stamping Fee Amounts.
A. The surplus lines stamping fee is 1/4 of 1% of the policy premium
payable for the examination of a surplus lines transaction as required in
Subsection 31A-15-103(11)(d).
B. Late surplus lines stamping fee payments may be subject to late
fees of 25% of the stamping fee due plus 1 1/2% per month from the time of
default until full payment of the fee.
C. A courtesy filing fee is not included as surplus lines
premium for the purpose of computing taxes and stamping fees.
R590-157-5. Authorized Agency.
A. The commissioner hereby authorizes the Surplus Line Association of
Utah to act as his agent for:
(1) collecting and remitting the premium tax imposed by Section
31A-3-301 on insurance transactions described in Sections 31A-15-103,
31A-15-104, and 31A-15-106.
(2) examining surplus lines transactions under Section 31A-15-111; and
(3) collecting the stamping fee authorized under Section
31A-15-103(11).
B. The Surplus Line Association shall remit all premium taxes it
collects in accordance with the procedures of Section 6.
R590-157-6. Accounting Procedures.
A. Within 60 days of the effective date of a surplus lines
transaction, the surplus lines producer must file with the Surplus Line
Association a copy of the policy, binder, certificate, endorsement, or other
documentation sufficient to identify the subject of the insurance; the
coverage, conditions, and term of insurance; the type of transaction; the
effective date; the premium charged; the premium taxes payable; the name and
address of the policyholder and the insurer.
B. The Surplus Line Association may prescribe the forms and procedures
to be used by surplus lines producers in fulfilling Section R590-157-5.
C. The Surplus Line Association shall prepare a monthly statement of
surplus lines transactions reported during the preceding 30 days for each
surplus lines producer. This statement shall list the transactions and
premium amounts reported, the surplus lines premium taxes due under
31A-3-301, and the stamping fee due under Subsection 31A-15-103(11)(d).
D. The monthly statement shall be mailed to the surplus lines
producers by the 5th day of each month.
E. By the 25th day of each month the surplus lines producer shall
remit payment in full to the Surplus Line Association amounts due shown on
the monthly statement. Premium taxes and stamping fees shall be held in
trust by the surplus lines producer until remitted to the Surplus Lines
Association.
F. Within three days of the date received, the Surplus Line
Association shall deposit in a qualified depository approved by the Office
of the State Treasurer, for the credit of the Utah Insurance Department, all
funds received as payment of the surplus lines premium tax.
G. For tax credits for return premiums, which are not offset by
charges in the monthly statement, the Surplus Line Association shall submit
a request for payment to the Insurance Department. A reimbursement will be
issued to the designated person by the Insurance Department pursuant to the
Division of Finance's policies and procedures.
H. The Surplus Line Association shall prepare the following reports
for the benefit of the commissioner.
(1) A monthly report shall be prepared listing the surplus lines
producers reporting premiums written during the month and the amount of the
premiums, taxes and fees reported. The report shall also list the names of
surplus lines insurers and the amount of written premium attributed to them
for the month. This report shall be submitted by the 15th of the
subsequent month.
(2) An annual report shall be prepared on the basis of both surplus
lines producers and surplus lines insurers and shall list all premiums
reported and taxes paid during the previous calendar year. This report
shall be submitted to the commissioner by January 31 of each year.
(3) An annual financial report including income and expense and balance
sheet for the Surplus Lines Association shall be submitted to the
commissioner within 30 days of the end of the Association's fiscal year.
R590-157-7. Enforcement Date.
The commissioner will begin enforcing the revised provision of this
rule 45 days from the rule's effective date.
R590-157-8. Severability.
If any provision of this rule of
the application thereof to any person or circumstance is for any reason held
to be invalid, the remainder of the rule and the application of such
provision to other persons or circumstances shall not be affected thereby.
KEY: insurance fee, taxes
Date of Enactment or Last Substantive Amendment: [October 23, 2003]2007
Notice of Continuation: February 10, 2003
Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-3-303;
31A-15-103
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