Surplus Lines Insurance Fees and Taxes

PURPOSE: This rule clarifies and effectuates the provisions of Chapter 384, RSMo as amended by Senate Bill 250 in the First Regular Session of the 85th General Assembly with regard to the premium charged by surplus lines insurers. This rule is pursuant to the provisions of sections 374.045, 384.051, 384.057 and 384.059, RSMo. (1) For purposes of determining net premiums, as that term is used in sections 384.051, 384.057 and 384.059, RSMo, the gross amount of charges for surplus lines insurance shall include any fee charged to the insured and paid to the surplus lines insurer or surplus lines licensee for the placement of the surplus lines insurance. Notwithstanding the provisions of section (4) of this rule, any compensation received by the surplus lines licensee will be considered premium for purposes of the premium tax imposed by sections 384.051 and 384.059, RSMo, unless all the following conditions are met: (A) The surplus lines licensee is also the retail insurance producer (i.e., the surplus lines licensee has the primary direct relationship with the prospective policyholder); and (B) The surplus lines licensee’s compensation is received pursuant to an insurance producer’s agreement as permitted by 20 CSR 700-1.100; and (C) The amount of compensation excludable from the application of such premium tax does not exceed the amount of compensation such licensee would have received under such licensee’s insurance producer service agreement if surplus lines insurance was not involved. (2) The fees may include, but are not limited to, policy fees, inspection fees, fees charged by an insurance producer acting as a managing general agent for a surplus lines insurer or any other fee charged by surplus lines insurer or surplus lines licensee for the placement of surplus lines insurance. (3) All fees charged to the insured by the surplus lines insurer or surplus lines licensee shall be considered premium for purposes of the premium tax imposed by sections 384.051 and 384.059, RSMo. (4) Fees paid by an insured to an insurance producer and retained by an insurance producer pursuant to an insurance producer service agreement as permitted by 20 CSR 7001.100 shall not be considered premium for purposes of the premium tax imposed by sections 384.051 and 384.059, RSMo. AUTHORITY: sections 374.045, 384.051, 384.057 and 384.059, RSMo 2000.* This rule was previously filed as 4 CSR 19010.105. Original rule filed Jan. 17, 1990, effective June 11, 1990. Amended: Filed Sept. 24, 1991, effective Feb. 6, 1992. Amended: Filed July 12, 2002, effective Jan. 30, 2003. Amended: Filed Aug. 10, 2006, effective Feb. 28, 2007. *Original authority: 374.045, RSMo 1967, amended 1993, 1995; 384.051, RSMo 1987 amended 1989; 384.057, RSMo 1987, amended 1989; and 384.059, RSMo 1987, amended 1989.