Friday, August 21, 2009

NAPSLO contests Montana assuming collection of stamping fees

NAPSLO is submitting a letter and will take part in hearings on August 21 to contest the decision by the state of Montana to take over collection of stamping fees from the Montana Surplus Lines Agents Association (MSLAA).

Effective July 1, 2009 the Montana Commissioner of Securities and Insurance announced it would review and process surplus lines insurance submissions, determine applicable stamping fees owed, and send surplus lines agents tax and fee statements.

NAPSLO is questioning the basis for the state to take over the MSLAA’s duties in collecting the stamping fee. Under Montana state law “if a surplus lines advisory organization is not operating as set forth in this section, the stamping fee may be collected by the commissioner and placed in a state special revenue account for the expenses of regulating surplus lines” however the MSLAA was in operation at the time of the take over.

“NAPSLO’s view is that the state can step in only if there isn’t a surplus lines advisory organization collecting the fees, and there was an organization in place collecting the fees,” said NAPSLO Director of Government Relations Steve Stephan. “We believe under state law Montana must allow the MSLLAA to resume its role in collecting the stamping fees and processing submissions.”

In addition, Mr. Stephan noted in the letter to the department that it can only take over the stamping fee collection duties from an existing organization if there is a finding that the organization is not operating pursuant to Montana law. To date Mr. Stephan said there has been no examination by the commissioner finding a violation of law and no hearing has been provided to the MSLAA and as a result there is no basis to conclude that the advisory organization was not operating as required.

According to statistics from the Surplus Lines Stamping Office of Texas, $54.2 million in surplus lines premiums were written in Montana in 2008, and approximately $1.5 million would have been collected in surplus lines taxes and $542,000 in stamping fees.

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