2 New Appleman on Insurance Law Library Edition § 12.10

Summary

A surplus lines tax is levied on insurance premiums paid to surplus lines insurers (which are insurers that do not hold a certificate of authority from the state and are also known as non-admitted insurers). The surplus lines (sometimes also referred to as excess lines) tax is to be distinguished from the general insurance premium tax. The surplus lines tax is paid by and is the responsibility of a surplus lines broker who passes this cost on to the insured (see Section 12.10[2]). The amount of the tax varies by state, along with the procedures for paying and reporting the tax (see Section 12.10[3]). Some states have surplus line stamping offices to assist in the processing and collecting of surplus lines taxes (see Section 12.10[4]). Historically, when all of the risk or liability from a particular surplus lines insurance policy resided only in one state, all surplus lines taxes would be remitted to that particular state. However, when a policy covered risks in multiple states, the ...