Tuesday, July 03, 2012

NIMA Clearinghouse Updates; Nevada Withdraws

The NIMA Surplus Lines Clearinghouse has announced that Nevada submitted a notice of withdrawal from NIMA on June 29, 2012. On July 2nd, Nevada released Bulletin 12-005 indicating it will collect 100% of the nonadmitted insurance premium tax when Nevada is the home state of the insured. Where Nevada is not the home state of the insured, no premium tax filing in Nevada will be required.

Based on the resolution approved by the NIMA states on June 12th, Nevada will not be considered a NIMA participating state for the purposes of filing and allocating taxes for new and renewal policies effective on or after July 1, 2012 where the home state of the insured is a NIMA participating state. The remaining five NIMA states (Florida, Louisiana, South Dakota, Utah, and Wyoming) and Puerto Rico represent 17 percent of nationwide surplus lines premium. Thirty-four states, representing 73 percent of nationwide premium volume, have no current plans to participate in tax-sharing agreements and are collecting 100% of the surplus lines premium tax when they are the home state.

In its July 1st press release, the Surplus Lines Clearinghouse announced reporting entities may register to begin filing with the Clearinghouse by visiting www.slclearinghouse.com. It noted policies filed through the Clearinghouse during the 3rd quarter will be invoiced on October 1st. Tutorials are available on the Clearinghouse website at http://www.slclearinghouse.com/Education/VideoLibrary.aspx.

On July 2nd, the Surplus Lines Clearinghouse released the NIMA States Tax Table to serve as a guide for brokers and policyholders when determining the applicable taxes, fees, and assessments charged by the NIMA participating states. It highlights some of the nuances among the NIMA states, which include:
1. Louisiana and Utah will not collect any tax on premium allocated to a state that is not participating in NIMA (a non-participating state);
2. Florida is the only NIMA state that will tax premium allocated to non-participating states at each non-participating state’s tax rate. When either Puerto Rico, South Dakota or Wyoming are the home state, they will apply their home state tax rate to any premium allocated to a non-participating state.
3. Utah is the only NIMA state that will apply a stamping fee to Utah allocated premium.
4. Florida and South Dakota apply certain assessments and tax rates to certain premium and specific lines of coverage.

Reporting entities are encouraged to review the NIMA State Tax Table  and the Surplus Lines Clearinghouse Tax Calculator for help in navigating the tax rates, fees and assessments to be charged by the NIMA states on nonadmitted, multi-state insurance premium to be filed through the Clearinghouse.

Please make sure to check out our recent E-News updates regarding recent NIMA developments. They can be found at http://www.napslo.org/imispublic/Content/NavigationMenu/News/ENews/2012/default.htm. Please don’t hesitate to contact the NAPSLO office at (816) 741-3910 should you have any questions or need any additional information.

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