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NRRA & AB 315

NRRA & AB 315. Changes to Surplus Line Filings in California. The Basics. Determine Home State Pay 100% Premium Tax to the home state Provide the Disclosure Notic e/ Statement of the Home State

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NRRA & AB 315

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  1. NRRA & AB 315 Changes to Surplus Line Filings in California

  2. The Basics • Determine Home State • Pay 100% Premium Tax to the home state • Provide the Disclosure Notice/Statement of the Home State • Exempt Commercial Purchaser – Must have a Risk Manager and pay $100,000 in annual premiums to be exempt from the SL-2 Form and one of the following, (either $20M Net Worth, $50M Annual Revenues, or 500 Employees.) For Non Profit or Government ($30M budget or 50,000 in population.)

  3. Vetting Insurance Companies • LESLI • LASLI • Eligible Surplus Line Insurers • Non Approved/Non Eligible Insurance Carriers

  4. CALIFORNIA Differing Surplus Line Filing Exemptions • Exempt Commercial Purchasers- No Diligent Search ( SL2) – CIC Sec.1760.1(b) • Industrial Insureds – No D-1 – CIC Sec.1764.1(c) • Export List- No Diligent Search (SL2) – CIC Sec.1763.1 • Marine, Aviation, Transportation – No SLA Filing – CIC Sec.1760.5 • GAP Coverage – 20% of Risk from Non-Eligible Insurers – CIC Sec.1765.1 (h)

  5. State Tax Payments Under AB 315 • New or Renewal Policies effective 1/1/2011 to 7/20/2011 and produced prior to 7/21/2011 follow Pre-NRRA/AB315 Regulation and Law • Surplus Line brokers required to provide data on tax allocation relative to Multi-State policies in March 1 premium tax filing (To be waived by Commissioner until State joins a tax sharing arrangement or compact.)

  6. New Coversheet • Will be mandatory • Broker will be tagged for not submitting • Asks for ECP clarification • Asks for % of California premium

  7. Take aways • Under NRRA & CA AB315 • Home State has exclusive authority to tax and regulate surplus line transactions • No Tax Sharing Compact • 100% of Premium Tax on CA risks to be paid to CA.

  8. Take aways • Under NRRA & CA AB315 • Principal Place of Business per NIMA Provisions • Effective for Policies with Effective Date of 7/21/2011 Forward

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