CS/HB 1227

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

CODING: Words stricken are deletions; words underlined are additions.