No. 31939 (Amendment): R590-157. Surplus Lines Insurance Premium Tax and Stamping Fee

DAR File No.: 31939
Filed: 09/11/2008, 12:43
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the change is to reduce the surplus lines stamping fee from 1/4 of 1% to .15 of 1%. The fee is used to perform an examination of a surplus lines transaction by the Surplus Lines Association. They no longer need as much money to perform this task as they did in the past.

Summary of the rule or change:

The Authority section eliminates the general rulemaking code reference and reformats the rest of the rule. A new "Penalties" section is added to the rule but the penalties have not changed. The surplus lines stamping fee is reduced from 1/4 of 1% to .15 of 1%. The enforcement date is changed to 01/01/2009.

State statutory or constitutional authorization for this rule:

Sections 31A-3-303 and 31A-15-103

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no fiscal impact on the department. No additional filings or other work will impact the department. The reduction of the fee will only impact the Surplus Lines Association who receives and processes the surplus lines tax for each surplus lines policy and examines the transaction.

local governments:

The change in the percentage of the filing fee, or any other change in this rule will not affect local governments. It will reduce the amount surplus lines policyholders will have to pay and reduce the amount the Surplus Lines Association will receive to process these policies.

small businesses and persons other than businesses:

The changes to the rule will reduce the fee a surplus lines policyholder is required to pay to the Surplus Lines Association to examine the transaction and to receive and process the surplus lines tax on their policy.

Compliance costs for affected persons:

The changes to the rule will reduce the fee a surplus lines policyholder is required to pay to the Surplus Lines Association to examine the transaction and to receive and process the surplus lines tax on their policy.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will reduce income to the Surplus Lines Association at their request. D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/31/2008

This rule may become effective on:

11/07/2008

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance, Administration.

R590-157. Surplus Lines Insurance Premium Tax and Stamping Fee.

R590-157-1. Authority.

This rule is promulgated by the commissioner pursuant to Subsections:[ 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]

(1) 31A-3-303(2) which requires the commissioner by rule to prescribe accounting and reporting forms and procedures to be used in calculating and paying the surplus lines premium tax[,]; and

(2) [Subsection ]31A-15-103(11)(d) which requires the commissioner by rule 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 purposes[purpose] of this rule are[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.

 

R590-157-4. Stamping Fee Amounts.

A. The surplus lines stamping fee is .15[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.

 

R590-157-7. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under 31A-2-308.

 

[R590-157-7]R590-157-8. Enforcement Date.

The commissioner will begin enforcing the revised provision of this rule effective January 1, 2009[45 days from the rule's effective date].

 

R590-157-[8]9. Severability.

If any provision of this rule [of]or 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]the provision to other persons or circumstances shall not be affected thereby.

 

KEY: insurance fee, taxes

Date of Enactment or Last Substantive Amendment: [June 13, 2007]2008

Notice of Continuation: January 10, 2008

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-3-303; 31A-15-103